An investor wants to compare the risks associated with two different stocks. One way to measure the risk of a given stock is to measure the average of the stock's daily price changes. The investor obtains a random sample of 20 daily price changes for stock 1 and 20 daily price changes for stock 2. The sample average of the stock's daily price changes for stock 1 is 2.56 and for stock 2 is 1.65, and their corresponding sample standard deviations are 0.95 and 0.5 respectively (s1 = 0.95, s2 = 0.5).
A. Conduct a hypothesis test to test if the mean of the price changes of stock 1 differs from the mean of the price changes of stock 2 or not. Use α = 0.05 and interpret the results of the statistical test. Frame the hypothesis.
B. Find the p-value of the hypothesis test.