Investment options preference using ANOVA: single factor

Title: Investment options preference using ANOVA: single factor

 

Author: Vaishnavi Kulkarni (021330024462)

 

Introduction: Investing can be a great way to grow your wealth over time. This report focuses on understanding the preferences of investment options that people choose by analyzing their ratings for four major investments options i.e. Stocks, fixed deposits, gold and real estate. A statistical method, ANOVA: Single Factor, is used to determine if there is a significant difference in the ratings given to these genres.

 

Objective: To compare different investment options that is preferred most.

 

Data Collection:

The Data was collected from students by means of survey. Each student rated four investment options i.e. Stocks, fixed deposits, gold and real estate, on a scale of 1 to 10, were 1 indicates low preference and 10 indicates high preference. The ratings for each genre were recorded for analysis.

 

Data analysis:

The ANOVA: Single Factor test was performed to compare the means of the ratings across the four investment options.

The hypotheses for the test are:

  • Null Hypothesis (H0): There is no significant difference in the average ratings of Stocks, fixed deposits, gold and real estate.
  • Alternate Hypothesis (H1) At least one of the investment options has a significantly different average rating.

 

ANOVA

            

Source of Variation

SS

df

MS

F

P-value

F crit

Between Groups

2.351133

3

0.783711

0.115097

0.951003

2.726589

Within Groups

510.6868

75

6.809158

      
             

Total

513.038

78

        

 

Since the P-value (0.95) is much greater than 0.05, we accept the null hypothesis.

 

Conclusion:

As per the data analysis, there is no significant difference in the average ratings of Stocks, fixed deposits, gold and real estate.

 

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