**Title: Understanding Investor Sentiment Through Statistical Analysis****Overview:**The American Association of Individual Investors (AAII) conducts a weekly survey among its members to determine the percentage of those who are bullish, bearish, or neutral about the stock market for the next six months. For the week ending March 27, 2019, the survey reported 33.2% bullish, 39.6% neutral, and 27.2% bearish sentiment from a sample of 300 members.### Objectives:The primary aim is to test whether the current sentiment significantly differs from historical averages.### Hypothesis Testing:**a. Bullish Sentiment Analysis**- **Long-term Bullish Average:** 0.385- **Significance Level:** 5%- **Hypothesis:** - \( H_0: \) \( p = \) (long-term average) - \( H_a: \) \( p \neq \) (long-term average)**b. Bearish Sentiment Analysis**- **Long-term Bearish Average:** 0.31- **Significance Level:** 1%- **Hypothesis:** - \( H_0: \) \( p = \) (long-term average) - \( H_a: \) \( p > \) (long-term average)### Interpretation of Results:For both tests, a p-value is calculated to determine if the null hypothesis can be rejected, indicating a significant difference from the long-term average.### Considerations for Generalization:**c. Extensibility of Results to All Investors**Participants are prompted to consider whether these findings can be generalized to all investors, using the following options:1. No, due to differences in member demographics compared to other investors.2. No, because the sample is limited to AAII members.3. Yes, if AAII members are reflective of the broader investor population.4. Yes, assuming AAII membership does not bias the results.**Choose the Correct Option:** [Dropdown for selection]**Conclusion:**This exercise in hypothesis testing highlights how investor sentiment analysis can reveal deviations from established averages and guides in assessing the broader applicability of such insights.

Name: **Title: Understanding Investor Sentiment Through Statistical Analysi
Uploaded: 2024-03-20T07:06:16.000Z
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Description: **Title: Understanding Investor Sentiment Through Statistical Analysis****Overview:**The American Association of Individual Investors (AAII) conducts a weekly survey among its members to determine the percentage of those who are bullish, bearish, or

a. Given: n=300, p=0.332 The null and alternative hypothesis is, H0:P=0.385Ha:P≠0.385 The test statistic is, Z=p-P0P0(1-P0)nZ=0.332-0.3850.385(1-0.385)300Z=1.9The P-value is given by,P-value=P(Z>1.9)=0.0592 The level of significance is 0.05. If P-value=0.0592>alpha=0.05, we fail to reject H0. Hence, we reject that bullish sentiment differs significantly from its long term average of 0.385. b. Given: n=300, p=0.272 The null and alternative hypothesis is, H0:P=0.31Ha:P>0.31 The test statistic is, Z=p-P0P0(1-P0)nZ=0.272-0.310.31(1-0.31)300Z=1.4The P-value is given by,P-value=P(Z>1.4)=0.0774 The level of significance is 0.01. If P-value=0.0774>alpha=0.01, we fail to reject H0. Hence, we reject that bearish sentiment is greater than long term average of 0.31. c. No, one should not feel comfortable extending these results to all investors. Members of this professional association may be different from other types of investors. Therefore, it would be dangerous to generalize these results to all investors.

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Statistics

The American Association of Individual Investors (AAII) conducts a weekly survey of its members to measure the percent who are bullish, bearish, and neutral on the stock market for the next six months. For the week ending March 27, 2019, the survey results showed 33.2% bullish, 39.6% neutral, and 27.2% bearish. Assume these results are based on a sample of 300 AAII members. a. Over the long-term, the proportion of bullish AAII members is 0.385. Conduct a hypothesis test at the 5% level of significance to see if the current sample results show that bullish sentiment differs from its long-term average of 0.385. What are your findings? Ho: p - Select your answer- H: p - Select your answer- p-value: (to 4 decimals) We- Select your answer - that bullish sentiment differs significantly from its long-term average of 0.385. b. Over the long-term, the proportion of bearish AAII members is 0.31, Conduct a hypothesis test at the 1% level of significance to see if the current sample results show that bearish sentiment is above its long-term average of 0.31. What are your findings? Họ: p - Select your answer- H: p - Select your answer - p-value: (to 4 decimals) We - Select your answer- that bearish sentiment is greater than its long-term average of 0.31. c. Would you feel comfortable extending these results to all investors? Why or why not? I. No. One should not feel comfortable extending these results to all investors. Members of this professional association may be different from other types of investors. Therefore, it would be dangerous to generalize these results to all investors. II. No. One should not feel comfortable extending these results to all investors. All investors must be a member of this professional association. Therefore, it is dangerous to generalize these results to all investors. III. Yes. One should feel comfortable extending these results to all investors. The association contains investors. Therefore, it is fine to generalize these results to all investors. IV. Yes. One should feel comfortable extending these results to all investors. Members of this professional association may be different from other types of investors. Therefore, it is fine to generalize these results to all investors. Choose the correct option. Select your answer - :