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Price to Earnings Ratios One measure of the value of a stock is its price to earnings ratio (or P/E ratio): the ratio of the price of a stock per share to the earnings per share and can be thought of as the price an investor is willing to pay for $1 of earnings in a company. A stock analyst wants to know whether the P/E ratios for three industry categories differ significantly. The following data represent simple random samples of companies from three categories: (1) financial, (2) food, and (3) leisure goods.

(a) Test the null hypothesis that the mean P/E ratio for each category is the same at the level of significance. Note: The requirements for a one-way ANOVA are satisfied.

(b) If the null hypothesis is rejected in part (a), use Tukey’s test to determine which pairwise means differ using a familywise error rate of

(c) Draw boxplots of the three categories to support the analytic results obtained in parts (a) and (b).