Socially conscious investors screen out stocks of alcohol ard tobacco makers, fi

Question

Socially conscious investors screen out stocks of alcohol ard tobacco makers, firrms with por eerds, and companies with puor labor prectices. Sorme exemples of god, socily conscious companies are Joson and Johscr, Dell Computers, Bako America, and Home Depct. The question s, are such stocks over o d? One measure o va ue is the E or ce-to-arninos ra o High p E ratics may indicate·stock s overpriced. For the S Stock Indcx or all ma r st ks, the mean E ratio is 34. A random sampla at 31 soclycnscihus stocks gava a PE ratio sample mean of- 18.4, with samp a standard davlation s -4.a. Doas this indicate that tha mean P/E rato of all sodally conacious stocks is dfferant (elther way) tram tha maan P/F ratio of the SAP Stock Tndex? Use 0.10 a) what is the level of significance? State the null and alternate hypotheses O HO: = 19.4; H1 : > 19.4 b) what sampling distribution will you use Cxplain the rationale for your choice of sampling distriution The Student's t, since the sample 529 is large and is known. he standard normal, since the sample size is large and is unknown. The Student' The standard normal, sinca the sample size is larga and isnown. t, since the sample sue is large dnd o is unknown. What is the value of the sermple test statisti? (Round your answer to three decirmal places.) Find the Pvalue. (Raund your answar to tour decimal places.)

Explanation / Answer

The statistical software output for this problem is:

One sample T summary hypothesis test:
: Mean of population
H0 : = 19.4
HA : 19.4

Hypothesis test results:

Hence,

Sample test statistic = -1.160

P - value = 0.2552

Mean Sample Mean Std. Err. DF T-Stat P-value 18.4 0.86210545 30 -1.1599509 0.2552

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