Trading skills of institutional investors. The trading skills of institutional stock investors were quantified and analyzed in The Journal of Finance (April 2011). The study focused on “round-trip” trades, i.e., trades in which the same stock was both bought and sold in the same quarter. Consider a random sample of 200 round-trip trades made by institutional investors. Suppose the sample
- a. Specify the null and alternative hypotheses for determining whether the population of institutional investors performed successfully.
- b. Find the rejection region for the test using α = .05.
- c. Interpret the value of α in the words of the problem.
- d. A Minitab printout of the analysis is shown below. Locate the test statistic and p-value on the printout. [Note: For large samples. z ≈ t.]
- e. Give the appropriate conclusion in the words of the problem.
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