Related questions
Concept explainers
The price to earnings ratio (P/E) is an important tool in financial work. A random sample of 14 large U.S. banks (J. P. Morgan, Bank of America, and others) gave the following P/E ratios.†
| 24 | 16 | 22 | 14 | 12 | 13 | 17 | 22 | 15 | 19 | 23 | 13 | 11 | 18 |
The sample
Generally speaking, a low P/E ratio indicates a "value" or bargain stock. Suppose a recent copy of a magazine indicated that the P/E ratio of a certain stock index is μ = 18. Let x be a random variable representing the P/E ratio of all large U.S. bank stocks. We assume that x has a
Compute the z value of the sample test statistic. (Round your answer to two decimal places.)
____________________?
(c) Find (or estimate) the P-value. (Round your answer to four decimal places.)
__________________?
_______________________________________
Nationally, about 11% of the total U.S. wheat crop is destroyed each year by hail.† An insurance company is studying wheat hail damage claims in a county in Colorado. A random sample of 16 claims in the county reported the percentage of their wheat lost to hail.
| 14 | 8 | 7 | 10 | 14 | 18 | 13 | 9 |
| 7 | 10 | 26 | 20 | 15 | 10 | 14 | 7 |
The sample mean is x = 12.6%. Let x be a random variable that represents the percentage of wheat crop in that county lost to hail. Assume that x has a normal distribution and σ = 5.0%. Do these data indicate that the percentage of wheat crop lost to hail in that county is different (either way) from the national mean of 11%? Use α = 0.01.
Compute the z value of the sample test statistic. (Round your answer to two decimal places.)
________?
(c) Find (or estimate) the P-value. (Round your answer to four decimal places.)
__________?
Trending nowThis is a popular solution!
Step by stepSolved in 3 steps with 1 images
- The price to earnings ratio (P/E) is an important tool in financial work. A random sample of 14 large U.S. banks (J. P. Morgan, Bank of America, and others) gave the following P/E ratios†. 24 16 22 14 12 13 17 22 15 19 23 13 11 18 The sample mean is x≈ 17.1. Generally speaking, a low P/E ratio indicates a "value" or bargain stock. Suppose a recent copy of a magazine indicated that the P/E ratio of a certain stock index is μ = 19. Let x be a random variable representing the P/E ratio of all large U.S. bank stocks. We assume that x has a normal distribution and σ = 4.1. Do these data indicate that the P/E ratio of all U.S. bank stocks is less than 19? Use ? = 0.01. What is the level of significance? What is the value of the sample test statistic? (Round your answer to two decimal places.) Find (or estimate) the P-value. (Round your answer to four decimal places.)arrow_forwardAn operation analyst is forecasting this year's demand for one of his company's products based on the following historical data: (4 year ago Quantity sold was 1059), (3 year ago Quantity sold was 1169 ), (2 year ago Quantity sold was 1740 ) and the last year Quantity sold was 1903 . The previous trend line had predicted 1218 for three years ago, 1287 for two years ago and 1355 for last year. What was the mean squared error (MSE) for these forecasts? a. 169304.67 b. 19.67 c. 350 d. 0.2arrow_forwardHow productive are U.S. workers? One way to answer this question is to study annual profits per employee. A random sample of companies in computers (I), aerospace (II), heavy equipment (III), and broadcasting (IV) gave the following data regarding annual profits per employee (units in thousands of dollars). I II III IV 27.9 13.5 22.2 17.9 23.2 9.6 20.5 16.4 14.7 11.1 7.7 14.5 8.3 8.9 12.7 15.9 11.8 6.5 7.7 10.6 19.1 9.5 What are the degrees of freedom? (numerator) (denominator)(c) Find the P-value of the sample test statistic. P-value > 0.100 0.050 < P-value < 0.100 0.025 < P-value < 0.050 0.010 < P-value < 0.025 0.001 < P-value < 0.010 P-value < 0.001 (d) Based on your answers in parts (a) to (c), will you reject or fail to reject the null hypothesis? Since the P-value is greater than the level of significance at α = 0.05, we do not reject H0. Since the P-value is less than or equal to the level of significance at α = 0.05, we…arrow_forward
- The price to earnings ratio (P/E) Is an Important tool in financial work. A random sample of 14 large U.S. banks (JP Morgan Chase, Bank of America, and others) gave the following P/E ratios.t 24 16 22 14 12 13 17 22 15 19 23 13 11 18 The sample mean is x = 17.1. Generally speaking, a low P/E ratio indicates a "value" or bargain stock. Suppose a recent copy of a magazine indicated that the P/E ratio of a certain stock index is H = 18. Let x be a random variable representing the P/E ratio of all large U.S. bank stocks. We assume that x has a normal distribution and o = 4.7. Do these data indicate that the P/E ratio of all U.S. bank stocks is less than 18? Use a = 0.01. (a) What is the level of significance? State the null and alternate hypotheses. Will you use a left-tailed, right-tailed, or two-tailed test? O Ho: H = 18; H1: H # 18; two-tailed O Ho: H = 18; H1: H 18; right-tailed %3D O Ho: H # 18; H1: H = 18; two-tailed (b) What sampling distribution will you use? Explain the rationale…arrow_forward#2...Can you write out answer please n thank uarrow_forwardIn a data set of wages of productivity lost during a recent recession, the distribution can be roughly described as unimodal and very left-skewed. Select the most appropriate conclusion from the list of statements. A. Calculating the midrange is much more tedious process than calculating the mean. B. The median of wages lost must be far lower than the mean of wages lost. C. The mean is the most representative measure of center for this data set. D. If there are extremely high lost wages present, the mean will not be sensitive to these data values.arrow_forward
- MATLAB: An Introduction with ApplicationsStatisticsISBN:9781119256830Author:Amos GilatPublisher:John Wiley & Sons Inc
Probability and Statistics for Engineering and th...StatisticsISBN:9781305251809Author:Jay L. DevorePublisher:Cengage Learning
Statistics for The Behavioral Sciences (MindTap C...StatisticsISBN:9781305504912Author:Frederick J Gravetter, Larry B. WallnauPublisher:Cengage Learning 
Elementary Statistics: Picturing the World (7th E...StatisticsISBN:9780134683416Author:Ron Larson, Betsy FarberPublisher:PEARSON
The Basic Practice of StatisticsStatisticsISBN:9781319042578Author:David S. Moore, William I. Notz, Michael A. FlignerPublisher:W. H. Freeman
Introduction to the Practice of StatisticsStatisticsISBN:9781319013387Author:David S. Moore, George P. McCabe, Bruce A. CraigPublisher:W. H. Freeman