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During the last decade, a number of institutions dedicated to improving the quality of products and services in the United States have been formed. Many of these groups annually give awards to companies that produce high quality goods and services.
An investor believes that publicly traded companies that win awards are likely to outperform companies that do not win such awards. To help determine his return on investment in such companies, he took a random sample of 83 firms that won quality awards the previous year and computed the annual return he would receive had he invested.
Is there sufficient evidence, at the 1 percent significance level to suggest that the average return of these stocks exceeds the market average return for high growth stocks for that year? Assume that the market average return for high growth stocks is 12.7 percent.© BrainMass Inc. brainmass.com June 4, 2020, 1:15 am ad1c9bdddf
The expert examines the test significance of stock returns for companies.