The average daily volume of Dell Compute stock in 2000 was 3

The average daily volume of Dell Compute stock in 2000 was 31.8 million shares, with a standard deviation of 14.8 million shares, according to Yahoo! Finance. A stock analyst claim that the stock volume in 2004 is different from the 2000 level. Based on a random sample of35 trading days in 2004, he finds the sample mean to be 23.4 million shares. Test the analyst\'s claim at the 0.05 significance level. Use p-value method

Solution

Mean mu = 31.8

SD = 14.8

n =35

Sample Mean X-bar = 23.4

Null hypothesis : mu = 31.8

Alternate hypothesis : mu != 31.8

Since n >30 , z test is needed.

z = (Xbar - Mu)/(SD/sqrt(n))

= (23.4 - 31.8)/(14.8/sqrt(35))

= -3.36

This is a two-tailed test:

P-value = 0.0004 + 0.0004 = 0.0008 Answer

Since,

P-value < 0.05

Reject null hypothesis.