Be sure to answer all the following questions.
(a) Write the claim mathematically and identify H0 and H1:
(b) Find the critical values (CVs) and identify the rejection regions:
(c) Find the test statistic (TS):
(d) Decide whether to reject or fail to reject H0:
(e) Determine the p-value for the hypothesis test:
(f) Interpret the decision in the context of the original claim:
The following dataon annual rates of return were collected from five stocks listed on the New York Stock Exchange (“the big board”) and five stocks listed on NASDAQ. At the .10 significance level, can we conclude that the annual rates of return are higher on the big board?
This solution conducts a five-step hypothesis test by providing the null and alternative hypothesis and determining the test statistic to compare against the p-value. From this a decision is made to reject or accept the null hypothesis, and discuss if the annual rates of return are higher on the big board.