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An economist wants to determine whether average price/earnings (P/E) ratios differ for firms in three industries. Independent samples of five firms in each industry produced

  1. An economist wants to determine whether average price/earnings (P/E) ratios differ for firms in three industries. Independent samples of five firms in each industry produced the following results after conducting a one-way ANOVA. SSB (sum of squares between groups) = 258.82 and SST (sum of squares total) = 424.04. Based on this information, what statistical decision should be made when testing whether average P/E ratios differ in three industries at the 5% level of significance? Assume that P/E ratios are normally distributed.

    a.

    Reject the alternative hypothesis.

    b.

    Accept the null hypothesis.

    c.

    Do not reject the null hypothesis.

    d.

    Reject the null hypothesis.

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