Business analysis help
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hypothesis_testing.docxHypothesis Testing
In the banking industry, the return on equity ratio or percentage is used to evaluate the financial performance of a bank. Such information is extremely valuable to investors.
Calculate the return on equity (ROE) for a sample of 20 banks for the year before the Sarbanes-Oxley Act was enacted. For the same sample of banks, calculate the ROE for the year following the enactment of the Sarbanes-Oxley Act.
Later, answer the following questions:
· After the enactment of the Sarbanes-Oxley Act, was the average bank’s ROE lower than it was before the act? If so, why do you think that was the case?
· What is the null hypothesis for this hypothesis test?
· What is the alternative hypothesis for this hypothesis test?
· Choose at least three different significant levels to conduct the hypothesis test. Is it possible that a Type I error occurred with the hypothesis test? Why or why not?
· Is it possible that a Type II error occurred? Why or why not?
Submit your answers in an eight- to ten-page Word document.
