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    ANOVA testing for mean rate of return for 3 stocks

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    A stock analyst wants to determine whether there is a difference in the mean rate of return for three types of stock: utility, retail, and banking stocks. The following output is obtained:

    a. Using the .05 level of significance, is there a difference in the mean rate of return among the three types of stock?
    b. Suppose the null hypothesis is rejected. Can the analyst conclude there is a difference between the mean rates of return for the utility and the retail stocks? Explain.

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    Solution Summary

    A step-by-step method for testing the hypothesis under 5 step approach is discussed here. Excel template for each problem is also included. This template can be used to obtain the answers of similar problems.