Question

I have Stock Return of two Companies MSFT(Microsoft) and APPL (Apple).It is mentioned in the given Table.The Question is : '

''We would also like to check whether both stocks (Apple and Microsoft) have the same return on average. Using the confidence interval approach, perform and present an appropriate hypothesis test at the 5% level of significance, and interpret your result. Which stock would you prefer and why? [Hint: Hypothesis test about two population means. Zero marks if you test using an approach other than the confidence interval approach.]

Note:the Calculations should be made using EXCEL

'

R_MSFT (%)	R_APPL (%)
0.00	0.00
1.33	7.02
1.84	2.73
3.44	2.83
5.13	6.97
2.03	-1.72
1.26	6.95
1.82	9.64
-2.89	-7.46
-13.95	5.96
8.19	9.21
-7.55	-3.19
17.92	0.58
-3.73	4.02
-5.96	-3.79
5.62	-3.35
-7.05	-7.16
1.69	-2.35
17.34	8.01
3.20	-1.01
2.06	-11.68
-0.71	-7.82
-7.95	-0.67
8.20	11.97
-10.21	-15.07
6.09	6.32
-3.51	-4.36
10.23	8.62
1.37	1.80
0.24	6.34
3.95	0.43
0.57	-2.70
3.07	4.68
3.96	4.66
-1.04	12.12
2.90	4.75
3.87	-0.01
2.00	6.15
-1.31	-5.89
5.32	3.22
2.81	9.77
-0.38	-6.21
11.03	9.24
1.18	1.65
1.61	-1.54
10.50	-1.07
-1.31	6.19
-2.70	-5.98
2.44	-1.51
5.53	12.29
-0.23	-0.95
7.30	2.76
5.72	17.92
1.80	-0.83
-6.84	-3.10
3.75	-20.34
-8.78	-12.41
2.78	5.37
7.02	3.95
5.14	9.26
10.20	5.49

Answer 1

The calculation in the excel are give below

R_MSFT (%)	R_APPL (%)
0	0
1.33	7.02
1.84	2.73
3.44	2.83
5.13	6.97
2.03	-1.72
1.26	6.95
1.82	9.64
-2.89	-7.46
-13.95	5.96
8.19	9.21
-7.55	-3.19
17.92	0.58
-3.73	4.02
-5.96	-3.79
5.62	-3.35
-7.05	-7.16
1.69	-2.35
17.34	8.01
3.2	-1.01
2.06	-11.68
-0.71	-7.82
-7.95	-0.67
8.2	11.97
-10.21	-15.07
6.09	6.32
-3.51	-4.36
10.23	8.62
1.37	1.8
0.24	6.34
3.95	0.43
0.57	-2.7
3.07	4.68
3.96	4.66
-1.04	12.12
2.9	4.75
3.87	-0.01
2	6.15
-1.31	-5.89
5.32	3.22
2.81	9.77
-0.38	-6.21
11.03	9.24
1.18	1.65
1.61	-1.54
10.5	-1.07
-1.31	6.19
-2.7	-5.98
2.44	-1.51
5.53	12.29
-0.23	-0.95
7.3	2.76
5.72	17.92
1.8	-0.83
-6.84	-3.1
3.75	-20.34
-8.78	-12.41
2.78	5.37
7.02	3.95
5.14	9.26
10.2	5.49
xbar=average(R_MSFT)	ybar=average(R_APPL)
1.9237	1.4213
s2x=var(R_MSFT))	s2y=var(R_APPL)
35.3060	50.9013
S=sqrt(((n-1)*s2x + (n-1) * s2y)/(n+n-2))
6.5653