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The Price to earring Ratio of (abbreviated PE) is a financial indicator used to analyze stocks....

The Price to earring Ratio of (abbreviated PE) is a financial indicator used to analyze stocks. Companies from different sectors of the economy have different PE ratios. Suppose the following PE ratios are random sample of companies in the computer sector:

17.5 25 32 20.5 40 18 28 32 41 36 31 32 19 25 26 30

A stockbroker claims that the AVERAGE PE ratio for the all the companies in the computer sector is different than 26. It is known that the standard deviation of PE ratio in the computer sector is 8. Conduct a hypothesis test at the 5% level of significance level and give an appropriate decision and a conclusion.

math   Statistics-And-Probability   
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