Statistics 401 Mod 3 SLP - Hypothesis Testing II - Coursework Example

It is merely based on a hunch or general observation without hard facts to support it. This implies that it calls for a means of testing whether or not it is true at the end of the research. There are two types of hypothesis; one is the null hypothesis which implores that there is no relationship between two variables under observation. In the case of this study in which the variables are my stock price and the DJIA, The null hypothesis is that there is no relationship between my stock price and the DJIA.

The second type of hypothesis is the alternative hypothesis. This offers the opposite idea from that of the null hypothesis. It states that indeed there is a relationship between the two variables in question. . 1.86 3.46 -12.87 54 15.08 227.41 12 -2.41 5.81 36.34 48 9.08 82.45 18 3.59 12.89 32.59 37 -1.92 3.69 16 1.86 3.46 3.57 70 31.08 965.97 15 0.59 0.35 18.34 23 -15.92 253.45 12 -2.41 5.81 38.37 36 -2.92 8.53 13 -1.41 1.99 4.12 35 -3.92 15.37 14 -0.41 0.17 1.61 21 -17.92 321.13 11 -3.41 11.63 61.11 55 16.08 258.57 16 1.86 3.46 29.

91 TOTAL 467 2183.95 173 52.66 208.61 AVERAGE 38.92 14.41 r= 208.61 [(sqrt 2183.95)(sqrt 52.66)] = 0.309 Confirming in the table of the value of r shown below:- If r = +.70 or higher Very strong positive relationship +.40 to +.69 Strong positive relationship +.30 to +.39 Moderate positive relationship +.20 to +.29 weak positive relationship +.01 to +.19 No or negligible relationship -.01 to -.19 No or negligible relationship -.20 to -.29 weak negative relationship -.30 to -.39 Moderate negative relationship -.40 to -.69 Strong negative relationship -.

70 or higher Very strong negative relationship ‘r’ is between 0.30 and 0.39 and therefore a moderate positive relationship. This implies that there is moderate positive relationship between my stock price and the DJIA. This confirms the alternative hypothesis which stated that; there is a relationship between my stock price and the DJIA REFERENCES Soper, H.E., Young, A.W., Cave, B.M., Lee, A., Pearson, K. (1917). "On the distribution of the correlation coefficient in small samples. Appendix II to the papers of "Student" and R. A. Fisher.

A co-operative study", Biometrika, 11, 328-413.