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Non paramteric test: Wilcoxon-Signed rank test

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The 1997 price/earnings ratios for a sample of 12 stocks are shown in the following list ( Barron's, December 8, 1997). Assume that a financial analyst has provided the estimated price/earnings ratio for 1998. Using a .05 level of significance, what is your conclusion about the differences between the price/earnings ratios for 1997 and 1998?

COMPANY 1997 P/E RATIO 1998 P/E RATIO
Coca-Cola 40 32
Du Pont 24 22
Eastman Kodak 21 23
General Electric 30 23
General Mills 25 19
IBM 19 19
McDonalds 20 17
Merck 29 19
Motorola 35 20
Philip Morris 17 18
Walt Disney 33 27
Xerox 20 16

(See attached file)

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Solution Summary

The solution uses Wilcoxon-Signed rank test to test the hypothesis that the price/earnings ratios for 1997 and 1998 are different.

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