Question
A stock analyst wondered whether the mean rate of return of financial, energy and utility stocks differed over the past 5 years. He obtained a
A stock analyst wondered whether the mean rate of return of financial, energy and utility stocks differed over the past 5 years. He obtained a simple random sample of eight companies from each of the three sectors and obtained the 5-year rates of return shown in the following table (in percents):
Financial | Energy | Utilities |
10.76 | 12.72 | 11.88 |
15.05 | 13.91 | 5.86 |
17.01 | 6.43 | 13.46 |
5.07 | 11.19 | 9.90 |
19.50 | 18.79 | 3.95 |
8.16 | 20.73 | 3.44 |
10.38 | 9.60 | 7.11 |
6.75 | 17.40 | 15.70 |
Required:
(a) State the null and alternative hypothesis.
(b) Are the mean rates of return different at the alpha = 0.05 level of significance? Please explain your answer, citing numeric and other evidence in support of your response.
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