An investment counselor, Anna Lynn, wonders if the Metals fund is significantly riskier than the Income fund. She randomly selected 10 investors ( n1 ) of buying Metals fund and 12 investors ( n2 ) of buying Income fund. The average return of Metals fund ( x1 ) is 24.65% while the average return of Income fund ( x2 ) is 8.51%. In addition, the standard deviation of return for Metal fund ( s1 ) is 37.13% while the standard deviation of return for Income fund ( s2 ) is 11.07%. Let investors of buying Metals fund be group 1 while investors of buying Income fund be group 2. a. Use math symbol to formulate null and alternative hypotheses to test whether or not the Metals fund is significantly riskier than the Income fund. b. At the 0.05 level of significance, what is the value of the test statistic? What are degrees of freedom? What is the critical value? Using the critical value approach, is the Metalsfund is significantly riskier than the Income fund? What is your conclusion? Interpret.
An investment counselor, Anna Lynn, wonders if the Metals fund is significantly riskier than the Income fund. She randomly selected 10 investors ( n1 ) of buying Metals fund and 12 investors ( n2 ) of buying Income fund. The average return of Metals fund ( x1 ) is 24.65% while the average return of Income fund ( x2 ) is 8.51%. In addition, the standard deviation of return for Metal fund ( s1 ) is 37.13% while the standard deviation of return for Income fund ( s2 ) is 11.07%. Let investors of buying Metals fund be group 1 while investors of buying Income fund be group 2.
a. Use math symbol to formulate null and alternative hypotheses to test whether or not the Metals fund is significantly riskier than the Income fund.
b. At the 0.05 level of significance, what is the value of the test statistic? What are degrees of freedom? What is the critical value? Using the critical value approach, is the Metalsfund is significantly riskier than the Income fund? What is your conclusion? Interpret.
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