Are stock splits beneficial to stockholders? SNL Securities studied stock splits in the banking indu
Question: Are stock splits beneficial to stockholders? SNL Securities studied stock splits in the banking industry over an 18-month period and found that stock splits tended to increase the value of an individual’s stock holding. Assume that of a sample of 20 recent stock splits, 14 led to an increase in value, four led to a decrease in value, and two resulted in no change. Suppose a sign test is to be used to determine whether stock splits continue to be beneficial for holders of bank stocks.
a) What are the null and alternative hypotheses?
b) With α = .05, what is the rejection rule?
c) What is your conclusion?
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See Solution: The answer consists of 2 pages
Deliverables: Word Document![](/images/msword.png)
Deliverables: Word Document
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