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Hypothesis Testing of a Sample of Stock Prices

 

In order to organize the data so that it would be more useful to me, I sorted the spreadsheet by the stock prices in ascending order. I then utilized Excel to assist me in finding the mean and standard deviation of the sample prices of the stocks on my list of 30 companies. My calculations gave me the mean of 31.17966667 (or 31.18) and the standard deviation of 25.8590277 (or 25.86). I utilized Excel to also assist me in computing the average stock price for the 50 stocks from the first index in Project III. My calculations gave me the mean of 38.887 (or 38.89).
             Histogram.
             To create the Histogram of the stock prices, I mirrored the criteria given in Project III and limited it to only 8 bars. Therefore, I first had to determine the appropriate class width. I took the largest stock price and subtracted the smallest stock price and then .
             divided that number by eight (for the eight bars of the histogram). This gave me a class width of $16.63 per class. I then created the ranges for each of my eight classes and utilized Excel's "FREQUENCY" function to calculate the number of stocks that fell within each class width. (See Appendix C) From this data frequency table, I was able to create the Histogram of stock prices for this project. (See Diagram # 1 Below).
             .
             This histogram shows the frequency distribution of the stock prices over the range of $3.00 to $136.11 in class widths encompassing $16.63 each. As is demonstrated by the graph the largest portion (or 11 out of 30 stocks) of the stocks fell within the $3.00 to $19.63 range. The smallest portion (or 1 out of 30 stocks) of stock fell within the range of $119.48 to $136.11. None of the sampled stocks fell in any of the three categories that ranged from $69.56 to $119.47. .
             Normal Population or Not.
             Based upon my calculations of the sample data that showed the mean as 31.18 and the standard deviation as 25.86, I do not believe that the distribution of all 500 stocks from the second index is normal.


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