Question

Stocks may be categorized by sectors such as consumer cyclical stocks and industrial stocks. A financial manager believed that the average rate of return of consumer cyclical stocks is different from that of industrial stocks. He collected data from consumer cyclical stocks and industrial stocks and did an independent two samples t-test in SPSS. The results are shown below:

Independent Samples Test
		Levene's Test for Equality of Variances		t-test for Equality of Means
		F	Sig.	t	df	Sig. (2-tailed)	Mean Difference	Std. Error Difference	95% Confidence Interval of the Difference
									Lower	Upper
Rate_of_Returns	Equal variances assumed	1.524	.219	-2.522	192	.012	-7.83021	3.10479	-13.95408	-1.70634
	Equal variances not assumed			-2.528	184.656	.012	-7.83021	3.09773	-13.94170	-1.71872

Use the 5% level of significance, compare the p-value to  and make the decision.

	a.	None of the choices
	b.	P-value > . Don't reject Ho, we don't have strong evidence to support H1 that the average rate of return of consumer cyclical stocks is different from that of industrial stocksTest statistic t = -2.528; p-value = 0.012
	c.	P-value < . Reject Ho, we have strong evidence to support H1 that the average rate of return of consumer cyclical stocks is different from that of industrial stocks
	d.	P-value > . Reject Ho, we have strong evidence to support H1 that the average rate of return of consumer cyclical stocks is different from that of industrial stocksTest statistic t = -2.528; p-value = 0.012
	e.	P-value < . Don't reject Ho, we don't have strong evidence to support H1 that the average rate of return of consumer cyclical stocks is different from that of industrial stocksTest statistic t = -2.528; p-value = 0.012

Answer 1