Question

Create the printout for testing whether the mean current stock price of all NASDAQ stocks exceeds $22.00 and attach it here. Answer the following questions regarding this printout:

One-Sample T Test

Null Hypothesis: μ = 22

Alternative Hyp: μ ≠ 22

                                                         Lower       Upper

Variable     Mean       SE       T    DF        P    95% C.I.   95% C.I.

Close      47.942   8.9817   2.89   64   0.0053     29.998     65.885

Cases Included 65    Missing Cases 0

1. State the assumption necessary for this printout to be valid.

2. State the null and alternative hypotheses that we would use to determine if the mean current stock price of all NASDAQ stocks exceeds $22.00.

H_o:

H_a:

3. In the words of the problem, give a practical conclusion for this test. Make sure to include your choice of α in this conclusion.

Answer 1

• Assumption:
  The data must be Normally distributed.
  
  
• Here, we are to test:
  
  
  Our test statistic is given by:
  
  
  Given data:
  
  
  n = 65
  
  We reject H₀ at level 0.05 iff
  
  
  Now,
  
  
  
  We observe that,
  
  
  
  Hence, we reject H₀ at 5% level of significance, and conclude that mean NASDAQ stocks exceeds $22.00.
  
  
  

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