The table below gives data on the monthly returns on the S&P 500 and small-cap stocks for

Question:

The table below gives data on the monthly returns on the S&P 500 and small-cap for the period January 1960 through December 1999 and provides statistics relating to their mean differences.

Differences S&P 500 Small-Cap Stock Return (%) (S&P 500– Small-Cap Stock) Measure Return (%) January 1960-December 199

Let Î¼ d stand for the population mean value of difference between S&P 500 returns and small-cap stock returns. Use a significance level of 0.05 and suppose that mean differences are approximately normally distributed.
A. Formulate null and alternative hypotheses consistent with testing whether any difference exists between the mean returns on the S&P 500 and small-cap stocks.
B. Determine whether or not to reject the null hypothesis at the 0.05 significance level for the January 1960 to December 1999 period.
C. Determine whether or not to reject the null hypothesis at the 0.05 significance level for the January 1960 to December 1979 sub-period.
D. Determine whether or not to reject the null hypothesis at the 0.05 significance level for the January 1980 to December 1999 sub-period.

Stocks
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...