Statistics of Business and Finance - Hypothesis Testing and Interpretation

STATISTICS OF BUSINESS AND FINANCE
STUDENT NAME/ID
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(1) Return (%) for S&P Price Index, Boeing Company and General Dynamics is given below.
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Jarque Berra Test to check the normal distribution of the data variables.
JB stat =( N
6 ) (S2+ ( K −3 )2
4 )
Where,
N= Number of observations
K = Kurtosis
S= Skew value
Case 1: Boeing Returns (%)
Null hypothesis H0: Variable follows normal distribution.
Alternative hypothesis H1: Variable does not follow normal distribution.
JB stat = 10.04
The JB stat calculated is lower than critical value and thereby, rejection will not be done for null
hypothesis. Hence, Boeing Retunrs follows normal distribution.
Case 2: General Dynamics Returns (%)
Null hypothesis H0: Variable follows normal distribution.
Alternative hypothesis H1: Variable does not follow normal distribution.
JB stat = 33.0
The JB stat calculated is higher than critical value and thereby, rejection will be done for null
hypothesis as a result of this rejection, alternative hypotehsis is accepted. Hence, General
Dynamics returns do not follow normal distribution.
(2) Hypothesis test
Claim to test: Mean of General Dynamics Returns is not same as 2.8%.
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