The Manager of a Chain of Shops Compares the Average

question 23

Multiple Choice

The manager of a chain of shops compares the average revenues of two outlets, using data on revenues for 15 randomly selected days of the past year. Summary statistics for the revenue calculated using the given data for both outlets follow. ​ ​ Use the output from the Shiny app "Randomization Test for the Difference in Two Population Means Using Independent Samples" to complete an appropriate hypothesis test. ​ ​ Interpret the obtained results, using a significance level of 0.1. ​

• A) There is convincing evidence of a difference in the population means for the two outlets.
• B) There is convincing evidence that the mean for outlet 2 is greater than the mean for outlet 1.
• C) There is no convincing evidence of a difference in the population means for the two outlets.
• D) There is convincing evidence that the mean for outlet 1 is greater than the mean for outlet 2.
• E) The samples are too small to make a conclusion with the output.

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Definitions:

ROE

Return On Equity, a profitability ratio that measures the ability of a firm to generate profits from its shareholders' investments in the company.

Required Return

The minimum expected return an investor demands to compensate for the risk of an investment.

Plowback Ratio

The proportion of earnings retained by a company rather than distributed to its shareholders as dividends.

P/E Multiple

Also known as Price-to-Earnings Ratio, it compares a company's share price to its per-share earnings, used to evaluate if a stock is over or undervalued.