You collect data of average annual returns for Amazon Stock and Microsoft Stock and make the following table: (This data can be copied into Excel.) Year Amazon Return Microsoft Return 2013 0.5896 0.1221 2014 -0.2218 0.2416 2015 1.1778 0.1944 2016 0.1095 0.1200 2017 0.5596 0.3766 2018 0.2843 0.1874 2019 0.3216 0.5526 You use this data to answer the research question: are true population Amazon Returns greater than true population Microsoft Returns?
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
You collect data of average annual returns for Amazon Stock and Microsoft Stock and make the following table: (This data can be copied into Excel.)
Year | Amazon Return | Microsoft Return |
2013 | 0.5896 | 0.1221 |
2014 | -0.2218 | 0.2416 |
2015 | 1.1778 | 0.1944 |
2016 | 0.1095 | 0.1200 |
2017 | 0.5596 | 0.3766 |
2018 | 0.2843 | 0.1874 |
2019 | 0.3216 | 0.5526 |
You use this data to answer the research question: are true population Amazon Returns greater than true population Microsoft Returns?
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