Hypothesis Testing Using One Sample
For this practical application assignment you will use the daily adjusted closing price data you downloaded in Module 1. You may use the Hypothesis Tester Single Sample document linked in Resources to complete both scenarios. You may also want to review the SAS One Sample T-Test tutorial also located in the Resources.
Practical Application Scenario 1
Often it is interesting to know whether mean adjusted closing prices have changed from some base value. Suppose you are interested in whether the mean adjusted daily closing price for the stock you downloaded in Module 1 has increased from some base price (for example $4 or $10 or . . .). For our purposes we will assume that you are interested in whether the mean daily adjusted closing price has increased from the oldest daily adjusted closing price in your dataset (for example the one from five years ago). Conduct a hypothesis test that the mean adjusted daily closing price has increased from the base price. Assume that the stock price is sufficiently normal to conduct a t-test.Note: you might also transform the stock to normality that is applying the natural logarithm.
To successfully complete this hypothesis test do the following:
Practical Application Scenario 2
To explore your stock dataset you decide that you want to know whether your stock’s mean daily volume has increased or decreased from the oldest closing value in your data set (in other words the closing volume from five years ago). Often you would conduct a test like this with two samples but for now we will just use the oldest closing value as the baseline. Conduct a hypothesis test to see if the mean daily volume differs from the oldest daily volume in your dataset. Complete the following.
Assignment Submission
You must submit two documents. First you must compile all of your answers in a Microsoft Word file pasting in the tables and graphics you created to demonstrate your work (submitted as a .docx file). Second you must upload the raw data (as a .csv file) that you used to do your analysis for the purposes of instructor replication. Failure to upload the second file will result in a score of zero on the assignment until the file is submitted. Assignments must be submitted to the assignments area for grading. Work e-mailed or otherwise presented cannot be graded in accordance with Capella grading standards. Because of the nature of statistics-based assignments your instructor cannot give feedback on drafts of your work. Instead if you have questions as you complete assignments you are encouraged to attend the weekly supplementary instruction sessions or to consult the archived sessions for suggestions. Refer to the scoring guide prior to submission to ensure you meet all evaluation criteria.
