Question

Do sit down restaurant franchises and fast food franchises differ significantly in stock price? Specifically, is the average stock price for sit-down restaurants greater than the average stock price for fast food restaurants? A hypothesis test for two independent samples is run on data recorded from the stock exchange and a p-value is calculated to be 0.4023. What is the appropriate conclusion?

Question 4 options:

1)	We did not find enough evidence to say the average stock price of sit-down restaurants is greater than the average stock price of fast food restaurants.

2)	We did not find enough evidence to say the average stock price of sit-down restaurants is less than the average stock price of fast food restaurants.

3)	We did not find enough evidence to say a significant difference exists between the average stock price of sit-down restaurants and the average stock price of fast food restaurants.

4)	The average stock price of sit-down restaurants is significantly greater than the average stock price of fast food restaurants.

5)	The average stock price of sit-down restaurants is less than or equal to the average stock price of fast food restaurants.

Answer 1

Here, P_value = 0.4023

Suppose we are consider alpha = 0.05

We know that,

If P_value > alpha then we fail to reject Ho.

Here,

Ho : The average stock price of sit down restaurant is less than or equl to the average stock price of the fast food restaurants.

H1 : The average stock price of sit down restaurants is greater than the average stock price of fast food restaurants.

Here, P_value > alpha.

That is, we don'y have sufficient evidence to reject Ho at alpha=5%

Conclusion:

We did not find enough evidence to say the average stock price of sit down restaurants is greater than average stock price of fast food restaurants.

option (1) is correct.