Question

For the following​ experiment, identify how​ control, randomization, and replication were used.

An investment club decided to compare investment strategies. Starting with nine equal investment​ amounts, three invested in underperforming stocks. The relative amounts to invest in each of the stocks were chosen randomly and differently for each fund. Three funds invested following the advice of a TV investment show​ host, again choosing the specific stocks and allocations randomly for the three funds. And three funds invested by throwing darts at the page of the newspaper that lists​ stocks, and invested in each of the stocks hit by a​ dart, throwing a different set of darts for each of the three funds. At the end of six​ months, the funds were compared.

How was control​ used?

A. The strategies were developed by the same club.

B. The strategies were tested at the same time.

C. The darts strategy was completely random.

The data above is all the information's that the professor provided. Please provide answer with an explanation. Thanks

Answer 1

The three investments were invested in underperforming stocks, so this is not a control but treatment group as the stocks selected were underperforming

Three funds invested following the advice of a TV investment show​ host. This is also not control but treatment group as the stocks selected were selected based on the advice and thus have more chances of performing in future.

The three funds invested by throwing darts at the page of the newspaper that lists​ stocks are completely random stocks which can be underperforming or performing well. This group of funds can be treated as a control group.

C. The darts strategy was completely random.