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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Stocks: Retail and Utility 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 32 retail stocks such as Toys “
” Us,
Best Buy, and Gap was studied for x1, profit as a percentage of stockholder equity. The result was
. A random sample of 34 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
. Assume that σ1= 4.1and σ2= 2.7.
(a) 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 95% confidence interval for μ1- μ2.
(b) Interpretation Examine the confidence interval and explain what it means in the context of this problem. Does the interval consist of numbers that are all positive? all negative? of different signs? At the 95% level of confidence, does it appear that the profit as a percentage of stockholder equity for retail stocks is higher than that for utility stocks?
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