Answered: Let x be a random variable representing…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Let x be a random variable representing dividend yield of Australian bank stocks. We may
assume that x has a normal distribution with σ = 2.4%. A random sample of 15 Australian
bank stocks has a sample mean of x = 6.83%. For the entire Australian stock market, the
mean dividend yield is μ = 6.9%. Do these data indicate that the dividend yield of all
Australian bank stocks is higher than 6.9%? Use α = 0.05. What is the value of the test
statistic?

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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