Suppose that random samples of 50 returns for each of the following investment classes give the indicated
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Fixed annuities: = 7.83%, s = .51% Domestic large-cap stocks: = 13.42%, s = 15.17% Domestic midcap stocks: = 15.03%, s = 18.44% Domestic small-cap stocks: = 22.51 %, s = 21.75%
a. For each investment class, set up the null and alternative hypotheses needed to test whether the current mean return differs from the historical (1970 to 1994) mean return given in Table 3.11 (page 143).
b. Test each hypothesis you set up in part a at the .05 level of significance. What do you conclude? For which investment classes does the current mean return differ from the historical mean?
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Related Book For
Business Statistics In Practice
ISBN: 9780073401836
6th Edition
Authors: Bruce Bowerman, Richard O'Connell
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