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.† 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 = 5.3. Do these data indicate that the P/E ratio of all U.S. bank stocks is less than 19? Use α = 0.01. A) Compute the z value of the sample test statistic. (Round your answer to two decimal places.) B) Find the P-value. (Round your answer to four decimal places.)
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.†
| 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
A) Compute the z value of the sample test statistic. (Round your answer to two decimal places.)
B) Find the P-value. (Round your answer to four decimal places.)
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