Hypothesis Testing/Regression Analysis/ANOVA Testing

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RES342

QUESTION ONE

Solution:
Hypotheses:
H There is no difference between the mean annual rates of return between NYSE and NASDAQ, i.e.
HA: The mean annual rates of return of big board is higher than that of NASDAQ, i.e.
Test Statistic: t = follows a t-distribution with (n-1) degrees of freedom.
Level of significance:
Decision Rule: Reject the null hypothesis if p-value < alpha.
Calculations:
NYSE NASDAQ D
17.16 15.8 1.36
17.08 16.28 0.8
15.51 16.21 -0.7
8.43 17.97 -9.54
25.15 7.77 17.38
Mean D = 1.86
SD = 9.730848
t = =
p-value = 0.345512
Conclusion: Since p-value is greater than 10%, we do not reject the null hypothesis. Hence, there is insufficient evidence to conclude at 10% level of significance that the mean annual rates of return of big board are higher than that of NASDAQ.

QUESTION TWO

Solution:

Automobile Regular Mid-grade Super Premium
1 21 23 26
2 23 22 25
3 24 25 27
4 24 24 26
5 26 26 30
6 26 26 27
7 28 28 32

Anova: Single ...