1. Diversty or be Sued! An investor with a stock portfolio worth several hundred thousand dollars sued his broker because lack of diversification in his portfolio led to poor performance (low returns) The table below gives the rates in percentages for the 39 months that the account was managed by the broker. An arbitration panel composed these returns with average of the Standard and Poor's stock index for the same period. Consider the 39 SRS monthly returns the broker would generate if he managed the account forever. Are these returns compatible with a population mean of .95%, the S&P 500 averaged over 35 years? The numbers are already in percentages. -8.36 1.62 -2.27 -2.93 -2.7 6.82 -2.93 -1.03 4.34 12.03 -9.14 -9.16 12.22 -2.64 -2.35 -1.22 -3.58 -5.11 5.04 6.13 -.8 -7.24 7.00 -1.44 -15.25 1.28 -1.01 -8.66 -.65 -1.25 -7.21 4.33 -.09 2.35 -10.27 7.34 -2.14 -1.41 -2.56 a. Test the investors' claim at the alpha level .05 significance level. (name the hypotheses, parameter, type of test and make sure the condition are met) b. Find and interpret the C.I. that coincide with the alpha level given. c. Describe the Type I and Type II Eror in words. Which error is the most serious in term of the person suing?
1. Diversty or be Sued! An investor with a stock portfolio worth several hundred thousand dollars sued his broker because lack of diversification in his portfolio led to poor performance (low returns) The table below gives the rates in percentages for the 39 months that the account was managed by the broker. An arbitration panel composed these returns with average of the Standard and Poor's stock index for the same period. Consider the 39 SRS monthly returns the broker would generate if he managed the account forever. Are these returns compatible with a population mean of .95%, the S&P 500 averaged over 35 years? The numbers are already in percentages. -8.36 1.62 -2.27 -2.93 -2.7 6.82 -2.93 -1.03 4.34 12.03 -9.14 -9.16 12.22 -2.64 -2.35 -1.22 -3.58 -5.11 5.04 6.13 -.8 -7.24 7.00 -1.44 -15.25 1.28 -1.01 -8.66 -.65 -1.25 -7.21 4.33 -.09 2.35 -10.27 7.34 -2.14 -1.41 -2.56 a. Test the investors' claim at the alpha level .05 significance level. (name the hypotheses, parameter, type of test and make sure the condition are met) b. Find and interpret the C.I. that coincide with the alpha level given. c. Describe the Type I and Type II Eror in words. Which error is the most serious in term of the person suing?
Chapter6: Exponential And Logarithmic Functions
Section6.8: Fitting Exponential Models To Data
Problem 3TI: Table 6 shows the population, in thousands, of harbor seals in the Wadden Sea over the years 1997 to...
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