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Followings Tables shows previous 11 months stock marketreturns.

Date

Monthly

SP500 Return

Monthly DJIA Return

12/7/2007

-0.8628

-0.7994

1/8/2008

-6.1163

-4.6323

2/8/2008

-3.4761

-3.0352

3/8/2008

-0.5960

-0.0285

4/8/2008

4.7547

4.5441

5/8/2008

1.0674

-1.4182

6/8/2008

-8.5962

-10.1937

7/8/2008

-0.9859

0.2468

8/8/2008

1.2191

1.4548

9/8/2008

-9.2054

-6.0024

10/8/2008

-16.8269

-4.8410

1. Let consider we know the variance of monthly return for allstock were 25 percent in 2008, perform the following hypothesis foreach index:

Ho :  µ = -5

Ha :  µ ? -5

2. Considering the population variance is unknown, perform ahypothesis test if the average stock return is 0 or not for eachindex:

Ho :  µ = 0

Ha :   µ ?  0

3. Perform following hypothesis based on all assumption we hadin 2)

Ho :  µ ? -3

Ha :   µ <  -3

4. Let’s consider the population mean of SP500 as µ1 and that ofDJIA as µ2 while none of population variance is known. Testfollowing hypothesis:

  Ho : µ1  =  µ2

Ha :   µ1 ?  µ2

5. Let’s consider the population variance of SP500 as?21and that of DJIA as?22, and none of them are known. Testfollowing hypothesis:

  Ho:  ?21  =  ?22

  Ha:  ?21?  ?22

6. Perform the following hypothesis test

  Ho:  ?21  ?  ?22

  Ha:  ?21>  ?22

Answer & Explanation Solved by verified expert
3.6 Ratings (634 Votes)
ans as for given data 1 a Twosample T for Monthly vs Monthly DJIA Return N Mean StDev SE Mean Monthly 11 360 613 18 Monthly DJIA Return 11 225 405 12 Difference Monthly Monthly DJIA Return Estimate for difference 136 95 CI for difference 598 326 TTest of difference 5 vs TValue 164 PValue 0116 DF 20 Both use Pooled StDev 51956 b Twosample T for Monthly vs Monthly DJIA Return N Mean StDev SE Mean Monthly 11 360 613 18 Monthly DJIA Return 11 225 405 12 Difference Monthly Monthly DJIA Return    See Answer
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