American association of individual investors

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Reference no: EM131083883

The American Association of Individual Investors conducts a weekly survey of its members to measure the percent who are bullish, bearish, and neutral on the stock market for the next six months. For the week ending November 7, 2012 the survey results showed 38.5% bullish, 21.6% neutral, and 39.9% bearish (AAII website, November 12, 2012). Assume these results are based on a sample of 300 AAII members.

a. Over the long-term, the proportion of bullish AAII members is .39. Conduct a hypothesis test at the 5% level of significance to see if the current sample results show that bullish sentiment differs from its long-term average of .39. What are your findings?

H0p - Select your answer -greater than or equal to .39greater than .39less than or equal to .39less than .39equal to .39not equal to .39Item 1 

Hap - Select your answer -greater than or equal to .39greater than .39less than or equal to .39less than .39equal to .39not equal to .39Item 2 p-value - Select your answer -equal to .8572equal to .7562equal to .6541equal to 0not equal to 0Item 3

Conclusion:

- Select your answer -Conclude that bullish sentiment differs significantly from its long-term average of .39.Cannot conclude that bullish sentiment differs significantly from its long-term average of .39.Item 4

b. Over the long-term, the proportion of bearish AAII members is .30. Conduct a hypothesis test at the 1% level of significance to see if the current sample results show that bearish sentiment is above its long-term average of .30. What are your findings?

H0p - Select your answer -greater than or equal to .30greater than .30less than or equal to .30less than .30equal to .30not equal to .30Item 5 

Hap - Select your answer -greater than or equal to .30greater than .30less than or equal to .30less than .30equal to .30not equal to .30Item 6 p-value - Select your answer -equal to .8572equal to .7562equal to .6541approximately equal to 0not equal to 0Item 7

Conclusion:

- Select your answer -Conclude that bearish sentiment is significantly greater than its long-term average of .30.Cannot conclude that bearish sentiment is significantly greater than its long-term average of .30.Item 8

c. Would you feel comfortable extending these results to all investors?

Reference no: EM131083883

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