Determine if stocks from socially conscious companies

Reference no: EM13128929

Socially conscious investors screen out stocks from alcohol and tobacco companies in favour of more "socially conscious" enterprises. One popular measure of stock value is the P/E ratio (price to earnings ratio), with a high P/E indicating that the stock might be overpriced (pay more for less earnings). The stock index of all major stocks has a mean P/E ratio of 19.4. A random sample of 36 "socially conscious" stocks gave a P/E ratio of 17.9 with a standard deviation of 5.2. Determine, with 95% confidence, if the stocks from "socially conscious" companies are different from the mean P/E ratio of all other major stocks. Please conduct a complete hypothesis test and find the p-value.

Reference no: EM13128929

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