An investor with a stock portfolio worth several hundred thousand dollars sued his broker and brokerage firm because he felt tha
t lack of diversification in his portfolio led to poor performance for many years in a row. In an effort to avoid close public scrutiny, the firm agreed to settle the conflict by an arbitration panel. The arbitration panel compared a sample of 39 months of the investor's returns with the average of the Standard & Poor's 500-stock index for the same period in order to determine whether there was a substantial decrease. Historically, the S&P has a mean return of 0.95. Suppose that you are a member of this arbitration panel. Conduct a hypothesis test to determine if the investor's portfolio performed significantly worse than the performance of the S&P 500. Use a level of significance of alpha=0.05 . Open the data file Rates of Return. Use this information to answer questions 1 through 5.
1. Give a 95% confidence interval for the true mean return of the investor's portfolio. Round your answer accurate to three decimal places in interval notation. Be sure to put the lower bound in the first box and the upper bound in the second. [Example: (42.335, 54.859)]
( , )
2. Is the alternative hypothesis for this test one-tailed or two-tailed?
a. One-tailed
b. Two-tailed
3. What is the t-score for this test? Give your answer accurate to three decimal places. (Example: -3.234)
4. What is the P-value for this test? Give your answer accurate to three decimal places. (Example: 0.034)
5. Based on the results of this test, is there enough evidence to say that the investor's portfolio performed significantly worse than the S&P 500?
a. Yes, because we rejected the null.
b. Yes, because we failed to reject the null.
c. No, because we rejected the null.
d. No, because we failed to reject the null.
1. Give a 95% confidence interval for the true mean return of the investor's portfolio. Round your answer accurate to three decimal places in interval notation. Be sure to put the lower bound in the first box and the upper bound in the second. [Example: (42.335, 54.859)]
( , )
2. Is the alternative hypothesis for this test one-tailed or two-tailed?
a. One-tailed
b. Two-tailed
3. What is the t-score for this test? Give your answer accurate to three decimal places. (Example: -3.234)
4. What is the P-value for this test? Give your answer accurate to three decimal places. (Example: 0.034)
5. Based on the results of this test, is there enough evidence to say that the investor's portfolio performed significantly worse than the S&P 500?
a. Yes, because we rejected the null.
b. Yes, because we failed to reject the null.
c. No, because we rejected the null.
d. No, because we failed to reject the null.
1 answer:
You might be interested in
we know that
<u>The correlation coefficient</u> is a number between and
that represent the linear dependence of two variables or sets of data
Using the function CORREL in a excel tool, calculate the correlation coefficient (r)
see the attached table
the correlation coefficient for the data in the table is equal to
therefore
<u>the answer is</u>
