Comparing Annual Returns NOTE: You need to use the Excel functions/tools for the test rather than just typing numbers into the cells. Along with the Excel tutorial videos presented each week, examples in Chapter 10 work through similar problems, so please review these before attempting the lab.
For your first assignment as a financial analyst intern, you have been asked to compare returns for two high growth industries, health and information technology. One of your fellow interns has already started the project and has randomly sampled 20 firms in each industry. The annual return data (given in percentages) is provided in the "MAT312 Excel Lab #4 Data File" which can be downloaded here from Canvas.
MAT312 Excel Lab 4.xlsx
For part 1 of your assignment, you’ll need to download the Excel data file, and conduct the appropriate hypothesis test to determine whether the average returns in each industry differ (use a 5% significance level, and assume that population variances are not equal.) The results of your testing need to be shown in the space provided in the file. This will be submitted to Canvas through the assignment link.
For part 2 of the assignment, your new boss has required you to submit a report the provides the descriptive statistics for each industry, as well as comments on the reward and risk for investing in each. You will also analyze the results of your statistical test and summarize the conclusion in the context of the problem. What are your final recommendations and why? This should be written as if you were writing a professional report to your employer, not an outline of tasks you did for a project in stat class. Let your instructor know if you are not sure of this difference. You can find a sample report (for a different type of test!) on page 389 in the textbook to see how a statistical report can look.
Annual Returns (%) for 20 randomly sampled firms in health and info tech.
Health Information Technology
10.29 4.77
32.17 1.14
34.27 -12.72
10.57 48.1
20.27 6.69
31.43 11.65
15.4 53.28
0.88 -10.41
17.85 50.88
28.98 48.63
6.49 24.67
28.73 23.88
8.17 -14.8
14.83 6.94
12.89 29.52
23.51 43.42
29.14 23.56
4.42 -6.62
34.67 45.55
13.21 22.61