Hypothesis test: Two investors ability to predict stock returns
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Two investors predict financial returns of different stocks.
Stock Actual Returns Investor 1 Prediction Investor 2 Prediction
A 10.4 10.1 11.0
B 11.6 11.0 10.0
C 12.1 13.1 14.0
D 9.6 9.2 9.5
a. Test the null hypothesis that both investors are no different from each other in predicting stock returns.
b. Describe how you can perform the same hypothesis test, that the investors have the same predictive power, when there are 3 are more investors.
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Solution Summary
Provides steps necessary to determine two investors ability to predict stock returns.
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