Consider the profits of the aerospace firms in the Fortune 500, shown in Table 16.4.2.
a. Draw a histogram of these profit percentages. Describe the distribution.
b. Find the average and the median. Explain why they are either similar or different.
c. Use the t test to see if the mean profit (for the idealized population of similar firms operating under similar circumstances) is significantly different from zero. (Use the t test for now, even if you feel it is inappropriate.)
d. Use the sign test to see whether the median profit of this idealized population is significantly different from zero.
e. Compare these two testing approaches to this data set. In particular, which of these two tests (t test or sign test) is appropriate here? Are both appropriate? Why?

  • CreatedNovember 11, 2015
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