statistics Two stock portfolios wera compared to see if thei

Two stock portfolios wera compared to see if their mean annual return were different. Assume that the type I error (alpha ) is 0.05.Here are the result:Two sample Assuming Unequal variances Since both samples are based on stock portfolios, the appropriate test is a paired t-test. True False If we do a two tailed test we should: Reject the null hypothesis of equal means since the two-tailed p-value of 0.003 is bigger than alpha. Fail to reject the null h>pothesis of equal means since the tw o-tailed p-value of 0.003 is less than the t Critical value of 2.12. Reject the null hypothesis of equal means since the two-tailed p-value of 0 003 is less than alpha. Rerun the test using the same data, but a different value of alpha since the hypothesized mean difference is equal to 0. If we do a tw o tailed test, we should:

Solution

1.

TRUE. We can pair each stock for their returns on a given year.

2.

OPTION C, as P < 0.05.

3.

OPTION C, as |t| > tcrit, or 3.524 > 2.210.