The data in Table 2 represent the rates of return of the Standard and Poor's Index of 500 Stocks from January 2002 through June 2005. Is there sufficient evidence to support the claim that positive monthly rates of return are random at the a = 0.05 level of significance? Table 2 Date Return (%) Date Return (%) Date Return (%) Date Return (%) 1/2002 -2.12 1/2003 -2.74 1/2004 1.73 1/2005 -2.53 2/2002 -2.08 2/2003 -1.70 2/2004 1.22 2/2005 1.89 3/2002 3.67 3/2003 0.84 3/2004 -1.64 3/2005 -1.91 4/2002 -6.14 4/2003 8.10 4/2004 -1.68 4/2005 -2.01 5/2002 -0.91 5/2003 5.09 5/2004 1.21 5/2005 3.00 6/2002 -7.25 6/2003 1.13 6/2004 1.80 6/2005 0.90 7/2002 -7.90 7/2003 1.62 7/2004 -3.43 8/2002 0.49 8/2003 1.79 8/2004 0.23 9/2002 -11.00 9/2003 -1.19 9/2004 0.94 10/2002 8.64 10/2003 5.50 10/2004 1.40 11/2002 5.71 11/2003 0.71 11/2004 3.86 12/2002 -6.03 12/2003 5.08 12/2004 3.25 Source:Yahoo! Finance

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4. Calculate test statistic or p - value. 
5. Make statistical Decision
6. Draw Conclusion

The data in Table 2 represent the rates of return of the
Standard and Poor's Index of 500 Stocks from January 2002
through June 2005. Is there sufficient evidence to support the
claim that positive monthly rates of return are random at the
a = 0.05 level of significance?
Table 2
Date
Return (%)
Date
Return (%)
Date
Return (%)
Date
Return (%)
1/2002
-2.12
1/2003
-2.74
1/2004
1.73
1/2005
-2.53
2/2002
-2.08
2/2003
-1.70
2/2004
1.22
2/2005
1.89
3/2002
3.67
3/2003
0.84
3/2004
-1.64
3/2005
-1.91
4/2002
-6.14
4/2003
8.10
4/2004
-1.68
4/2005
-2.01
5/2002
-0.91
5/2003
5.09
5/2004
1.21
5/2005
3.00
6/2002
-7.25
6/2003
1.13
6/2004
1.80
6/2005
0.90
7/2002
-7.90
7/2003
1.62
7/2004
-3.43
8/2002
0.49
8/2003
1.79
8/2004
0.23
9/2002
-11.00
9/2003
-1.19
9/2004
0.94
10/2002
8.64
10/2003
5.50
10/2004
1.40
11/2002
5.71
11/2003
0.71
11/2004
3.86
12/2002
-6.03
12/2003
5.08
12/2004
3.25
Source:Yahoo! Finance
Transcribed Image Text:The data in Table 2 represent the rates of return of the Standard and Poor's Index of 500 Stocks from January 2002 through June 2005. Is there sufficient evidence to support the claim that positive monthly rates of return are random at the a = 0.05 level of significance? Table 2 Date Return (%) Date Return (%) Date Return (%) Date Return (%) 1/2002 -2.12 1/2003 -2.74 1/2004 1.73 1/2005 -2.53 2/2002 -2.08 2/2003 -1.70 2/2004 1.22 2/2005 1.89 3/2002 3.67 3/2003 0.84 3/2004 -1.64 3/2005 -1.91 4/2002 -6.14 4/2003 8.10 4/2004 -1.68 4/2005 -2.01 5/2002 -0.91 5/2003 5.09 5/2004 1.21 5/2005 3.00 6/2002 -7.25 6/2003 1.13 6/2004 1.80 6/2005 0.90 7/2002 -7.90 7/2003 1.62 7/2004 -3.43 8/2002 0.49 8/2003 1.79 8/2004 0.23 9/2002 -11.00 9/2003 -1.19 9/2004 0.94 10/2002 8.64 10/2003 5.50 10/2004 1.40 11/2002 5.71 11/2003 0.71 11/2004 3.86 12/2002 -6.03 12/2003 5.08 12/2004 3.25 Source:Yahoo! Finance
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