Question

Determine whether the sampling method is independent or dependent. A stock analyst wants to know if there is a difference between the mean rate of return from energy stocks and that from financial stocks. He randomly selects 13 energy stocks and computes the rate of return for the past year.

Answer 1

The sampling method is independent.

Explanation:

Samples are said to be dependent when the data chosen in one sample has an effect on the data to be chosen in the other sample, while samples are said to be independent if the data chosen in one sample has no effect on the data to be chosen on the other sample.

Here, the stock analyst wants to know if there is a difference between the mean rate of return from energy stocks and that from financial stocks, so, he randomly selects 13 energy stocks. Since the energy stocks he chose were randomly selected, it means the data he selected from the energy stock will not dictate the type of data to be selected from the financial stock. Thus, the sampling method is said to be independent.