Refer to Exercise 6.36. Recall that stock screeners are automated tools used by investment companies to help
Question:
Refer to Exercise 6.36. 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.
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a. In Exercise 6.36a, 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 nonparametric 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 a = .05. Interpret your result in the context of the problem?
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
Step by Step Answer:
a In Exercise 636 we had to assume that the population of annualized ...View the full answer
Statistics For Business And Economics
ISBN: 9780134506593
13th Edition
Authors: James T. McClave, P. George Benson, Terry Sincich
