Do sit down restaurant franchises and fast food franchises differ significantly

Question

Do sit down restaurant franchises and fast food franchises differ significantly in stock price? Specifically, is the average stock price for sit-down restaurants different from the average stock price for fast food restaurants? A 2 sample t-test is run on data recorded from the stock exchange and a p-value is calculated to be 0.0389. What is the appropriate conclusion?

1) The average stock price of sit-down restaurants is significantly different from the average stock price of fast food restaurants.

2) The average stock price of sit-down restaurants is significantly less than the average stock price of fast food restaurants..

3) We did not find enough evidence to say a significant difference exists between the average stock price of sit-down restaurants and the average stock price of fast food restaurants.

4) The average stock price of sit-down restaurants is equal to the average stock price of fast food restaurants.

5) The average stock price of sit-down restaurants is significantly greater than the average stock price of fast food restaurants.

Do sit down restaurant franchises and fast food franchises differ significantly in stock price? Specifically, is the average stock price for sit-down restaurants less than the average stock price for fast food restaurants? A 2 sample t-test is run on data recorded from the stock exchange and a p-value is calculated to be 0.3968. What is the appropriate conclusion?

1) We did not find enough evidence to say the average stock price of sit-down restaurants is less than the average stock price of fast food restaurants.

2) We did not find enough evidence to say the average stock price of sit-down restaurants is greater than the average stock price of fast food restaurants.

3) We did not find enough evidence to say a significant difference exists between the average stock price of sit-down restaurants and the average stock price of fast food restaurants.

4) The average stock price of sit-down restaurants is significantly less than the average stock price of fast food restaurants..

5) The average stock price of sit-down restaurants is greater than or equal to the average stock price of fast food restaurants.

Explanation / Answer

1) For 5% significance level, the p-value will be less than the significance level (0.0389 < 0.05), so the null hypothesis will be rejected. Hence we can conclude that sit down resturant franchises fast food franchises differ significantly in stock prices.

so Option - 1) is correct.

2) For 5% significance level, the p-value will be greater than the significance level (0.3968 > 0.05), so the null hypothesis will be not rejected. Hence we can not conclude that sit down resturant franchises fast food franchises differ significantly in stock prices.

so Option - 3) is correct.

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