Question
Please help me quick! The price to earnings ratio (P/E) is an important tool in financial work. A random sample of 14 large U.S. banks
Please help me quick!
The price to earnings ratio (P/E) is an important tool in financial work. A random sample of 14 large U.S. banks (J. P. Morgan, Bank of America, and others) gave the following P/E ratios.
24 | 16 | 22 | 14 | 12 | 13 | 17 | 22 | 15 | 19 | 23 | 13 | 11 | 18 |
The sample mean isx17.1. Generally speaking, a low P/E ratio indicates a "value" or bargain stock. Suppose a recent copy of a magazine indicated that the P/E ratio of a certain stock index is=19. Letxbe a random variable representing the P/E ratio of all large U.S. bank stocks. We assume thatxhas a normal distribution and=4.5.Do these data indicate that the P/E ratio of all U.S. bank stocks is less than19? Use=0.01.
(a) What is the level of significance?
b) What is the value of the sample test statistic? (Round your answer to two decimal places.)
(c) Find (or estimate) theP-value. (Round your answer to four decimal places.)
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