A stock analyst wants to determine whether there is a difference in the mean return on equity
Question:
a. Using the .05 level of significance, is there a difference in the mean return on equity among the three types of stock?
b. Can the analyst conclude there is a difference between the mean return on equity for utility and retail stocks? For utility and banking stocks? For banking and retail stocks? Explain.
Analysis of Variance Source DF Adj S 303.697 Adj MS F-Value P-Value Factor 151.848 5.50 0.0202 12 331.381 27.615 Error Total 635.077 14 Means Factor N. Mean StDev 95% CI bank 5.318 3.904 (0.198, 10.438) (4.1956, 14.4364) (11.092, 21.332) 5 9.3160 5 16.212 uitility 1.5376 retail 8.077 Pooled StDev - 5,25500 Fisher Individual Tests for Differences of Means Difference of Levels Difference of Means SE of Difference 95% CI T-Value Adjusted P-Value 3.324 (3.243, 11.239) utility-bank 3.998 1.20 0.2522 retail-bank 3.324 (3.653, 18.135) 0.0066 10.894 3.28 3.324 (-0.345, 14.137) retail-utility 6.896 2.07 0.0602 Fisher Individual 95% Cls Differences of Means for bank, utility, retail utility-bark retail-bark retail-utlity - 10 15 20 If an interval does not contain 0, the corresponding means are significantly different.
Step by Step Answer:
a The hypothesis is H o m 1 m 2 m H 1 At least one mean differ...View the full answer
Basic Statistics For Business And Economics
ISBN: 9781260187502
9th Edition
Authors: Douglas A. Lind, William G Marchal, Samuel A. Wathen
Related Video
The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
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