Question

How profitable are different sectors of the stock market? One way to answer such a question is to examine profit as a percentage of stockholder equity. A random sample of 31 retail stocks such as Toys 'R' Us, Best Buy, and Gap was studied for x1, profit as a percentage of stockholder equity. The result was x1 = 14.6. A random sample of 31 utility (gas and electric) stocks such as Boston Edison, Wisconsin Energy, and Texas Utilities was studied for x2, profit as a percentage of stockholder equity. The result was x2 = 9.6. Assume that σ1 = 4.4 and σ2 = 3.6.

Let μ1 represent the population mean profit as a percentage of stockholder equity for retail stocks, and let μ2 represent the population mean profit as a percentage of stockholder equity for utility stocks. Find a 99% confidence interval for μ1 – μ2. (Use 1 decimal place.)

Lower limit=

Upper limit=

Answer 1

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