Question

7 -18 - points BBunderSt12 7 2 02 rour Tex The price of a share of shock divided by the company's estimated future earnings per share is called the P/E ratio. High P/E ratios usually inacate rowth stocks, or maybe stocks that are simply overpriced Low P/E ratics indicate "value stocks or bargain stocks. A random sample of 51 of the largest comparies in the United States gave the folowing P/E retios 11 35 19 13 15 21 40 18 60 72 9 20 29 53 16 26 21 14 21 27 10 12 47 14 33 14 18 17 20 19 13 25 23 27 5 16 8 49 44 20 27 8 19 12 31 67 51 26 19 18 32 (a) Use a calculator with mean and sample standard deviation keys to find the sample mean and samplie standand deviation s. (Round your answers to one decimal place nal-ace.) (b) Find a 90% confidence interva' forthe Pye population mean-of all arge us. compaves. <Round your answers to ove lower kmit upper imit ina Me) (Ord 99% contoence ntervai for the Pre popAaton mean μ o, al large us. companies. (Aound you, aswers to cre lower Breit upper limit parts (b) and (c. How weuld you with 3. P. Morgan) had P/E of 12, AT&T Wireless had a PyE of 72, and aney hed a Pye of z4 Exarune the corfidence intervale in () hank One (now merped describe these stocks at the time the sample was taken? we can say task One is belomerage, atove sverage we can say Bank One is telow averege, ATAT Wireless is above averagn, ATT Wireess is above average, and Dsney falls close to the average and Dsney is above average ST Wireless s stove averagn, aid Disney is below average i e "verage, Arar ATAT Wireless is below average, and Disney fals close to the average. we can say Bank one " normal Do we need te make such an ssumption in the pratiem? Why or why not? Mnt: Use the central sn (e) In previous preblems, we assumed the s distribution was nornal o theoren proximately sormal Yes. Accoraing to the central limit theorem, when a 5 30, the distnibution

Answer 1