Proportion of Total Assets invested in Stocks In the last de

(Proportion of Total Assets invested in Stocks) In the last decade stockbrokers have drastically changed the way they do business. Internet trading has become quite common and online trades can cost as little $7. It is now easier and cheaper to invest in the stock market than ever before. What are the effects of these change? To help answer this question, a financial analyst randomly sampled 366 American households and asked each to report the age of the head of the household and the proportion of their financial assets that are invested in the stock market. The age categories are: Young(<35), Early Middle Age (35-49), Late Middle Age (50-65) and Senior (over 65). The analyst was particularly interested in determining whether the ownership of stock varied by age. Some of data are as follow:

Professor: Hyungju Cha

Young

Early Middle Age

Late Middle Age

Senior

Mean

44.40

52.57

51.14

51.84

V ariance

386.55

469.44

471.82

447.79

# of Obs.

84

131

93

58

Grand Mean=50.18

Solution

From the data we observe that due to the change the early middle agers got more and more interested in investing in the stock market. They invest maximum in proportion of their assets than all other age groups. The late middle agers and seniors have also shown interest in inveting but the youths are still less interested than all other age groups and it tend to lower the mean proportion of investment too.