A financial analyst working for a financial consulting company wishes to find evidence that the average price-to-earnings ratio in the consumer industry is higher than average price-to-earnings ratio in banking industry.The alternative hypothesis is: A)$\mu$_consumer= $\mu$_banking B)$\mu$_consumer$\le$ $\mu$_banking C)$\mu$_consumer $\mu$_banking D)$\mu$_consumer

Question

A financial analyst working for a financial consulting company wishes to find evidence that the average price-to-earnings ratio in the consumer industry is higher than average price-to-earnings ratio in banking industry.The alternative hypothesis is: A)$\mu$_consumer= $\mu$_banking B)$\mu$_consumer$\le$ $\mu$_banking C)$\mu$_consumer > $\mu$_banking D)$\mu$_consumer< $\mu$_banking E)$\mu$_consumer $\neq$0 $\mu$_banking

Quizplus · Accepted Answer

The alternative hypothesis should state that the average price-to-earnings ratio in the consumer industry is higher than the average price-to-earnings ratio in the banking industry, which is represented by option C. Option A is unclear because it combines the mean and standard deviation into one equation. Option B states that the two means are equal or that the consumer industry has a lower price-to-earnings ratio than the banking industry, which is not consistent with the hypothesis being tested. Option D is the opposite of the alternative hypothesis, as it states that the price-to-earnings ratio in the consumer industry is lower than the banking industry. Option E is unclear and unnecessarily complicated, as it includes the symbol for "not equal to" without providing any additional meaning.

A Financial Analyst Working for a Financial Consulting Company Wishes μ\muμ

A Financial Analyst Working for a Financial Consulting Company Wishes $\mu$