Question

Many investors and financial analysts believe the Dow Jones Industrial Average (DJIA) gives a good barometer of the overall stock market. On January 31, 2006, 9 of the 30 stocks making up the DJIA increased in price (The Wall Street Journal, February 1, 2006). On the basis of this fact, a financial analyst claims we can assume that 30% of the stocks traded on the New York Stock Exchange (NYSE) went up the same day. A sample of 73 stocks traded on the NYSE that day showed that 26 went up. You are conducting a study to see if the proportion of stocks that went up is is significantly more than 0.3. You use a significance level of α = 0.01 .

What is the test statistic for this sample? (Report answer accurate to three decimal places.) test statistic =

What is the p-value for this sample? (Report answer accurate to four decimal places.) p-value =

The p-value is...

-less than (or equal to) α

-greater than α

This test statistic leads to a decision to...

- reject the null

-accept the null

-fail to reject the null

As such, the final conclusion is that...

-There is sufficient evidence to warrant rejection of the claim that the proportion of stocks that went up is is more than 0.3.

-There is not sufficient evidence to warrant rejection of the claim that the proportion of stocks that went up is is more than 0.3.

-The sample data support the claim that the proportion of stocks that went up is is more than 0.3.

-There is not sufficient sample evidence to support the claim that the proportion of stocks that went up is is more than 0.3.

Answer 1

Answer : Test statistic = 1.047

Using the P-value approach: The p-value is p = 0.1475, and since p=0.1475 ≥ 0.01, it is concluded that the null hypothesis is not rejected.

The p-value is...

Answer : greater than α

Answer : fail to reject the null

conclusion

Answer : There is sufficient evidence to warrant rejection of the claim that the proportion of stocks that went up is is more than 0.3.