Statistics for Business and Economics, Student Value Edition (13th Edition)
13th Edition
ISBN: 9780134456997
Author: James T. McClave, P. George Benson, Terry Sincich
Publisher: PEARSON
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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
Statistics for Business and Economics, Student Value Edition (13th Edition)
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