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is all about hypothesis testing.

According to the “demand” hypothesis, public firms, researchers have shown that profits produce smaller forecasting errors than the cash flow valuation models: since profits are more strongly associated with stock returns than cash flow, profits are more persistent than cash flow and are less volatile than the cash flow component. Thus accruals can provide useful information, despite the fact they are less persistent.

Recently, we found that STAT3 was upregulated by3.64-fold in MCF7 cells transfected with HER2 compared to a MCF7wild-type (). However, therelationship between STAT3 in primary tumors and HER2overexpression was not described. Thus, we hypothesized thatHER2-positive, ER-positive breast cancer cells expressedphosphorylated STAT3. To test this, we have examined tissuemicroarrays of 71 primary breast tumors with previously confirmedER, PR and HER2 expressions. We observed the phosphorylated STAT3expression from these breast tumors by immunohistochemistry. Wefound that pSTAT3 was expressed only in HER2(+) and ER(+) primarybreast tumors (). As shownin the figure, 9 out of 17 HER2/ER tumorsexpressed pSTAT3 and 6 out of 9 HER2 orHER2/ER tumors showed pSTAT3 expression(), moreover, 2 out of 4showed pSTAT3 in ER/PR/HER2 triple negative patient tissues. ThispSTAT3 activation is possibly through other STAT3 activationsignaling axis in triple negative breast tumors such as Src ornon-RTK phosphorylation mechanisms.

State Null and Alternative Hypotheses

Example 11.3. Hypotheses with One Sample of One Measurement Variable

State Null and Alternative Hypotheses

Given Stattic’s effect on reducing stem cell-likecharacteristics, we designed a combined treatment regimenconsisting of Stattic, STAT3 inhibitor, and Herceptin, HER2monoclonal antibody. The goal was to demonstrate thatHER2-positive, ER-positive cancer cells were more sensitive toHerceptin treatment when also exposed to Stattic, due to theinhibition of STAT3. This would also help prove the presence ofcross-talk between HER2/ER-STAT3 pathways through the synergisticeffect of the combined treatment. Thus, we hypothesized thatStattic could help delay or even reverse incurred resistanceassociated with HER2 overexpression.

Transcription factor slug, which has been implicatedas a driver for the epithelial-mesenchymal transition (EMT) wasupregulated in MCF7-HER2 cells (), leading us to the hypothesis that, HER2 induced stem cellmarker expression and slug upregulation promoted the EMT phenotypein MCF7 cells. Real-time PCR analyses showed the gene expressionpattern matching with the mesenchymal microenvironment, showingsignificant upregulation in vimentin, slug and concurrentdownregulation of E-cadherin in MCF7-HER2 compared with controlMCF7 wild-type (). In linewith the PCR data, western blot analyses revealed that epithelialmarker E-cadherin was downregulated, while mesenchymal makervimentin was upregulated in HER2 transfected MCF7 cells (). These results indicate that thesequential activations elicited by HER2 amplification converge intothe HER2-pSTAT3-stem cell markers - early EMT characteristics insignal pathways.

Example 11.4. Hypotheses with Two Samples of One Categorical Variable

Would you reject the hypothesis H(0):MU = 72 versus the alternative H(1):MU =/= 72 on the basis of the observations, when testing at level ALPHA = .05?

State Null and Alternative Hypotheses

This proce- dure can be viewed as a test of the hypothesis p = .05 against the alternative p > .05, p being the probability that the machine turns out a defective item.

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Example 11.5. Hypotheses with Two Samples of One Measurement Variable


State Null and Alternative Hypotheses

Our study considers a sample of Brazilian listed firms from 1999 to 2014. We consider Brazil as an opportunity to study the tension between the “demand” and “opportunistic” hypotheses because most Brazilian listed firms have concentrated control, which diminishes the importance of external equity funding. However, some listed firms do have truly dispersed control, which gives us the opportunity to assess how ownership concentration influences earnings quality in a setting of lower investor protection.

State Null and Alternative Hypotheses

Initially we tested the effect of STAT3 inHER2-positive breast cancer. We wished to determine whether theco-expression of HER2 and ER induced STAT3 phosphorylation, andwhether pSTAT3 promotes stem-like cell phenotype in the breastcancer model. To this end, the basal expression of STAT3 and stemcell markers were examined in various human breast cancer celllines by western blot analysis and real-time PCR. STAT3 wasphosphorylated in MCF7-HER2 cells, but not in MCF7 wild-type(). In addition, STAT3 wasphosphorylated in BT474 as well as at very low level in SKBR3. MCF7wild-type lacks HER2 amplification and SKBR3 lacks ER. This isconsistent with previous data in which MCF7 WT did not typicallyshow phosphorylation of STAT3 (,).Moreover, we found that the stem cell markers, Oct-4 and Sox-2,were expressed in MCF7-HER2 and BT474 cells, but not in MCF7wild-type and SKBR3 ().Real-time PCR analyses confirmed the upregulation of stem cellmarkers in HER2-overexpressing, ER-positive cancer cells (). Our results support thehypothesis that HER2 over-expression and ER positivity promoteSTAT3 phosphorylation and induces the stem cell-like phenotype.

State Null and Alternative Hypotheses

Note that this research question might also be addressed like example 11.4 by making the hypotheses about comparing the proportion of stroke patients that live with smokers to the proportion of controls that live with smokers.

the null hypothesis is rejected when it is true b.

A significance test examines whether the null hypothesis provides a plausible explanation of the data. The null hypothesis itself does not involve the data. It is a statement about a parameter (a numerical characteristic of the population). These population values might be proportions or means or differences between means or proportions or correlations or odds ratios or any other numerical summary of the population. The alternative hypothesis is typically the research hypothesis of interest. Here are some examples.

the null hypothesis is not rejected when it is false c.

Would you reject the hypothesis H(0):MU = 69 versus the (one-sided) alternative H(1):MU > 69 on the basis of your observations, when testing at level ALPHA = .05?

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