1. Is there enough evidence at the 5% level to show that the mean abnormal return is equal
to zero prior to the death of the key executive and less than zero afterward?
I do not believe that there is enough evidence to show that the mean abnormal return is
equal to zero prior to the death of the key executive and less than zero afterward. The
sample size is 21 (it has be 30 or above) and the population is not normally distributed,
which means that we cannot identify variance. However, we can use the t-test. For equal to
zero prior to deaths, we’ll use two-tailed test. The p-value will be approximately .0087 and
the alpha (given) is .05. Since the p-value is less than the alpha, we can reject the null
hypothesis which translates that at 5% level of confidence we can concluded that the
abnormal mean is equal to zero. For less than zero, we can use one-tailed test. Since we’re
doing one-tailed test sided, we’ll have to divide the alpha by two (.0025). The p-value will
be approximately around .005. Since p-value is greater than alpha, we fail to reject the null
hypothesis, which translates that abnormal return is not less than zero afterward.
2. Is there enough evidence at the 5% level to show that proportion of negative abnormal
return is equal to 50% prior to the death of the key executive and greater than 50%
afterward?
There is not enough evidence to show this.
1. From each of 10 industries, Michel and Shaked selected a sample of 13 American firms
and 13 Japanese firms. The average book value-based capitalization ratio that were
computed for each of the 10 industries, for 1981, are shown in Table A. Table B presents
similar information, using market value-based capitalization ratios. What would you
conclude from a comparison of these ratios?
From doing Descriptive Statistics option on Minitabs, I’ve concluded that the average
book value for the USA and Japan markets are .047110 and .31720, and the difference
between the two is .1539. There is a significant difference between the two. On the
other hand, I’ve concluded that the average market value for the USA and Japan markets
are .46550 and .45390, and the difference is .0116. This more significant compared to
the book value.
2. Conduct a test to determine if Japanese firms are more highly leveraged than American
firms based on book-value-based capitalization ratios. Use α = .05.
Based on my analysis on minitabs, there is evidence that Japanese firms are more highly
leverage then American firm when it comes to book value based capitalization ratios.
This study source was downloaded by 100000899606070 from CourseHero.com on 02-22-2026 22:45:53 GMT -06:00
https://www.coursehero.com/file/67762336/case-study-twodocx/
to zero prior to the death of the key executive and less than zero afterward?
I do not believe that there is enough evidence to show that the mean abnormal return is
equal to zero prior to the death of the key executive and less than zero afterward. The
sample size is 21 (it has be 30 or above) and the population is not normally distributed,
which means that we cannot identify variance. However, we can use the t-test. For equal to
zero prior to deaths, we’ll use two-tailed test. The p-value will be approximately .0087 and
the alpha (given) is .05. Since the p-value is less than the alpha, we can reject the null
hypothesis which translates that at 5% level of confidence we can concluded that the
abnormal mean is equal to zero. For less than zero, we can use one-tailed test. Since we’re
doing one-tailed test sided, we’ll have to divide the alpha by two (.0025). The p-value will
be approximately around .005. Since p-value is greater than alpha, we fail to reject the null
hypothesis, which translates that abnormal return is not less than zero afterward.
2. Is there enough evidence at the 5% level to show that proportion of negative abnormal
return is equal to 50% prior to the death of the key executive and greater than 50%
afterward?
There is not enough evidence to show this.
1. From each of 10 industries, Michel and Shaked selected a sample of 13 American firms
and 13 Japanese firms. The average book value-based capitalization ratio that were
computed for each of the 10 industries, for 1981, are shown in Table A. Table B presents
similar information, using market value-based capitalization ratios. What would you
conclude from a comparison of these ratios?
From doing Descriptive Statistics option on Minitabs, I’ve concluded that the average
book value for the USA and Japan markets are .047110 and .31720, and the difference
between the two is .1539. There is a significant difference between the two. On the
other hand, I’ve concluded that the average market value for the USA and Japan markets
are .46550 and .45390, and the difference is .0116. This more significant compared to
the book value.
2. Conduct a test to determine if Japanese firms are more highly leveraged than American
firms based on book-value-based capitalization ratios. Use α = .05.
Based on my analysis on minitabs, there is evidence that Japanese firms are more highly
leverage then American firm when it comes to book value based capitalization ratios.
This study source was downloaded by 100000899606070 from CourseHero.com on 02-22-2026 22:45:53 GMT -06:00
https://www.coursehero.com/file/67762336/case-study-twodocx/
