EBK STATISTICS FOR BUSINESS AND ECONOMI
13th Edition
ISBN: 8220103633567
Author: Sincich
Publisher: PEARSON
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Textbook Question
Chapter 15.2, Problem 15.12ACI
Performance of stock screeners. Refer to Exercise 6.36 (p. 326). Recall that stock screeners are automated tools used by investment companies to help clients select a portfolio of stocks to invest in. The annualized percentage returns on investment (as compared to the Standard & Poor’s 500 Index) for 13 randomly selected stock screeners provided by the American Association of Individual Investors (AAII) are repeated below.
- a. In Exercise 6.36, the t-distribution was used to find a 90% confidence interval for the average annualized percentage return on investment of all stock screeners provided by AAII. Explain why the resulting inference may be invalid.
- b. A positive annualized return reflects a stock portfolio that performed better than the S&P 500. State the null and alternative hypotheses for a non parametric test designed to determine if more than half of all AAII stock screeners perform better than the S&P 500.
- c. Conduct the test, part b, using α = .05. Interpret your result in the context of the problem.
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Chapter 15 Solutions
EBK STATISTICS FOR BUSINESS AND ECONOMI
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