Hypothesis testing I

Abstract

Someone holding shares in a company can adopt any of a wide variety of attitudes towards their disposal. These attitudes may vary from forgetting about them until retirement to considering afresh every day whether to sell them with a view to making a profit or minimizing a loss. He may have a cut-and-dried plan such as :

• (a) sell when the profit reaches a certain minimum ;

• (b) sell when some relevant index reaches a certain level.