Many investors and financial analysts believe the Dow JonesIndustrial Average (DJIA) gives a good barometer of the overallstock market. On January 31, 2006, 9 of the 30 stocks making up theDJIA increased in price (The Wall Street Journal, February 1,2006). On the basis of this fact, a financial analyst claims we canassume that 30% of the stocks traded on the New York Stock Exchange(NYSE) went up the same day.
A sample of 79 stocks traded on the NYSE that day showed that 33went up.
You are conducting a study to see if the proportion of stocks thatwent up is is significantly more than 0.3. You use a significancelevel of α=0.002.
What is the test statistic for this sample? (Report answeraccurate to three decimal places.)
test statistic =
What is the p-value for this sample? (Report answer accurate tofour decimal places.)
p-value =
The p-value is...
- less than (or equal to) αα
- greater than α
This test statistic leads to a decision to...
- reject the null
- accept the null
- do not reject the null
As such, the final conclusion is that...
- There is sufficient evidence to warrant rejection of the claimthat the proportion of stocks that went up is more than 0.3.
- There is not sufficient evidence to warrant rejection of theclaim that the proportion of stocks that went up is more than0.3.
- There is evidence to support the claim that the proportion ofstocks that went up is more than 0.3.
- There is not evidence to support the claim that the proportionof stocks that went up is is more than 0.3.
