Question: help please 5. [-/0.27 Points] DETAILS BBUNDERSTAT12 8.2.015.S. MY NOTES ASK YOUR TEACHER PRACTICE ANOTHER Socially conscious investors screen out stocks of alcohol and tobacco
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5. [-/0.27 Points] DETAILS BBUNDERSTAT12 8.2.015.S. MY NOTES ASK YOUR TEACHER PRACTICE ANOTHER Socially conscious investors screen out stocks of alcohol and tobacco makers, firms with poor environmental records, and companies with poor labor practices. Some examples of "good," socially conscious companies are Johnson and Johnson, Dell Computers, Bank of America, and Home Depot. The question is, are such stocks overpriced? One measure of value is the P/E, or price-to-earnings ratio. High P/E ratios may indicate a stock is overpriced. For the S&P Stock Index of all major stocks, the mean P/E ratio is u = 19.4. A random sample of 36 "socially conscious" stocks gave a P/E ratio sample mean of x = 17.9, with sample standard deviation s = 5.2. Does this indicate that the mean P/E ratio of all socially conscious stocks is different (either way) from the mean P/E ratio of the S&P Stock Index? Use ox = 0.05. LO USE SALT (a) What is the level of significance? State the null and alternate hypotheses. O HO:ML > 19.4; Hi: H = 19.4 O HO:Ml = 19.4; Hi; M > 19.4 O HO:M = 19.4; Hill 0.250 O 0.100
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