MY NOTES PRACTICE ANOTHER The sample mean is x 17.1. Generally speaking, a low P/E ratio in the P/E ratio of all U.S. bank stocks is less than 197 Use a 0.0e indicated that the P/E ratio of a certain stock index is 19. Let x be a random variable representing the P/E ratio of all large U.S. bank stocks. We assume The price to earnings ratio (P/E) is an important tool in financial work. A random sample of 14 large U.S. banks (3. P. Morgan, Bank of America, and others) gave the following P/E ratios.t 24 16 22 14 12 13 17 22 15 19 23 13 11 18 "value" or bargain stock. Suppose a recent copy of a magazine i that has a nomal distribution and 3.5. Do these data indicate th (a) What is the level of significance? State the null and alternate hypotheses. Will you use a left-tailed, right-taled, or two-taled test? Ho 19, H > 19; right-tailed Ho19, H 19; two-taled Ho 19, Ha< 19; left-tailed Ho 19; Hi 19; two-tailed (b) What sampling distribution will you use? Explain the rationale for your choice of sampling distribution. The standard normal, since we assume that x has a normal distribution with knowne The Student's t, since we assume that x has a normal distribution with knowne. The Student's t, since n is large with unknown e The standard normal, since we assume that x has a normal distribution with unknown e Compute the z value of the sample test statistic. (Round your answer to two decimal places) (c) Find (or estimate) the Pvalue. (Round your answer to four decimal places.) Sketch the sampling distribution and show the area corresponding to the Pvalue. (d) Based on your answers in parts (a) to (c), will At the a0.01 level, we reject the null hypothesis and condlude the data are statistically significant At the a0.01 level, we reject the null hypothesis and conclude the data are not statistically significant. At the a0.01 level, we fall to reject the null hypothesis and conclude the data are statistically significant AL the a0.01 level, we fail to reject the null hypothesis and conclude the data are not statistically significant. reject or fail to reject the null hypothesis? Are the data statistically significant at level a? (e) State your conclusion in the context of the There is suffdent evidenoe at the 0.01 level to conclude that the P/E ratio of all large U.S. bank stocks is less than 19 There is insufficient evidence at the 0.01 level to conclude that the P/E ratio of all large U.S. bank stocks is less than 19 application. Need Help? ME