An article in Fortune magazine reported on the rapid rise of fees and expenses charged by mutual funds. Assuming that stock fund expenses and municipal bond fund expenses are each approximately normally distributed, suppose a random sample of 12 stock funds gives a mean annual expense of 1.63 percent with a standard deviation of .31 percent, and an independent random sample of 12 municipal bond funds gives a mean annual expense of 0.89 percent with a standard deviation of .23 percent. Let µ1 be the mean annual expense for stock funds, and let µ2 be the mean annual expense for municipal bond funds. Do parts a, b, and c by using the equal variances procedure. Then repeat a, b, and c using the unequal variances procedure. (c) Calculate a 95 percent confidence interval for the difference between the mean annual expenses for stock funds and municipal bond funds. Can we be 95 percent confident that the mean annual expense for stock funds exceeds that for municipal bond funds by more than .5 percent? (Round your answer sx⎯⎯1−x⎯⎯2sx¯1−x¯2 to 4 decimal places and other answers to 3 decimal places.)
An article in Fortune magazine reported on the rapid rise of fees and expenses charged by mutual funds. Assuming that stock fund expenses and municipal bond fund expenses are each approximately
| (c) |
Calculate a 95 percent confidence interval for the difference between the mean annual expenses for stock funds and municipal bond funds. Can we be 95 percent confident that the mean annual expense for stock funds exceeds that for municipal bond funds by more than .5 percent? (Round your answer sx⎯⎯1−x⎯⎯2sx¯1−x¯2 to 4 decimal places and other answers to 3 decimal places.) |
| The interval = [ , ]. , the interval is .5. |
| Redo of (a) for unequal variances |
| H0: µ1 − µ2 0 versus Ha: µ1 − µ2 0 |
| Sx⎯⎯1−x⎯⎯2Sx¯1−x¯2 = t = |
| t.05 = so H0. |
| Redo of (b) for unequal variances |
| H0: µ1 − µ2 < .5 versus Ha : µ1 − µ2 |
| t = so H0. |
| Redo of (c) for unequal variances |
| The interval = [ , ]. , the interval is .5. |
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