Two Population Means with Unknown Standard Deviations · Try It 3
Weighted alpha is a measure of risk-adjusted performance of stocks over a period of a year. A high positive weighted alpha signifies a stock whose price has risen, while a small positive weighted alpha indicates an unchanged stock price during the time period. Weighted alpha is used to identify companies with strong upward or downward trends. The weighted alpha for the top 30 stocks of banks in the Northeast and in the West as identified by Nasdaq on May 24, 2013 are listed in and, respectively.
Is there a difference in the weighted alpha of the top 30 stocks of banks in the Northeast and in the West? Test at a 5 percent significance level. Answer the following questions:
(a) Is this a test of two means or two proportions?
(b) Are the population standard deviations known or unknown?
(c) Which distribution do you use to perform the test?
(d) What is the random variable?
(e) What are the null and alternative hypotheses? Write the null and alternative hypotheses in words and in symbols.
(f) Is this test right-, left-, or two-tailed?
(g) What is the p-value?
(h) Do you reject or not reject the null hypothesis?
(i) At the _____ level of significance, from the sample data, there ______ (is/is not) sufficient evidence to conclude that ______.
(j) Calculate Cohen’s d and interpret it.
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OpenStax, Statistics · §10.1 Two Population Means with Unknown Standard Deviations · Try It 3
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