A Financial Advisor Wants to Know Whether There Is a Significant

question 98

Essay

A financial advisor wants to know whether there is a significant difference between the NYSE and NASDAQ
markets in the annual dividend rates for preferred stocks. A sample of 30 returns is selected from each market.
Assume the two samples are random and independent. Test the claim that there is no difference in the annual
dividend rates for the two markets. Use $\alpha$ = 0.05. $$\begin{array}{l}\text { NASDAQ }\\\begin{array} { l l l l l l l l l l } 2.00 & 1.02 & 2.11 & 2.56 & 2.15 & 0.93 & 0.91 & 1.67 & 1.88 & 2.13 \\2.44 & 1.97 & 2.00 & 1.81 & 2.25 & 1.72 & 1.75 & 1.05 & 0.90 & 2.34 \\0.51 & 1.00 & 2.25 & 0.85 & 1.50 & 2.33 & 1.59 & 2.25 & 0.23 & 1.63\end{array}\end{array}$$ $$\begin{array}{l}\text { NYSE }\\\begin{array} { l l l l l l l l l l } 1.46 & 3.00 & 1.74 & 5.19 & 1.69 & 1.88 & 2.85 & 2.00 & 2.19 & 2.03 \\1.81 & 5.00 & 1.72 & 3.38 & 2.09 & 4.50 & 3.07 & 1.97 & 1.78 & 1.50 \\1.97 & 4.65 & 3.12 & 2.19 & 2.19 & 3.50 & 1.56 & 4.10 & 3.00 & 4.40\end{array}\end{array}$$

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Definitions:

Activity

Refers to any action or task performed within an organization that consumes resources.

Relevant Range

The range of activity over which a company expects its operating assumptions, such as cost behavior and sales mix, to remain valid, influencing budgeting and financial planning.

Fixed Costs

Costs that do not vary with the level of production or business activity, remaining constant even when output changes.

Variable Cost

Expenses that change in proportion to the activity or volume of business.