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Many investors and financial analysts believe the Dow Jones Industrial Average (DJIA) gives a good barometer...

Many investors and financial analysts believe the Dow Jones Industrial Average (DJIA) gives a good barometer of the overall stock market. On January 31, 2006, 9 of the 30 stocks making up the DJIA increased in price (The Wall Street Journal, February 1, 2006). On the basis of this fact, a financial analyst claims we can assume that 30% of the stocks traded on the New York Stock Exchange (NYSE) went up the same day.

A sample of 79 stocks traded on the NYSE that day showed that 33 went up.

You are conducting a study to see if the proportion of stocks that went up is is significantly more than 0.3. You use a significance level of α=0.002.

What is the test statistic for this sample? (Report answer accurate to three decimal places.)
test statistic =

What is the p-value for this sample? (Report answer accurate to four decimal places.)
p-value =

The p-value is...

  • less than (or equal to) αα
  • greater than α

This test statistic leads to a decision to...

  • reject the null
  • accept the null
  • do not reject the null

As such, the final conclusion is that...

  • There is sufficient evidence to warrant rejection of the claim that the proportion of stocks that went up is more than 0.3.
  • There is not sufficient evidence to warrant rejection of the claim that the proportion of stocks that went up is more than 0.3.
  • There is evidence to support the claim that the proportion of stocks that went up is more than 0.3.
  • There is not evidence to support the claim that the proportion of stocks that went up is is more than 0.3.

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