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Description: Assume that stock fund expenses and municipal bond fund expenses are each approximately normally distributed with equal population variances. Suppose that a random sample of 25 stock funds gives a mean annual expense of 1.15 percent with a standard d

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Assume that stock fund expenses and municipal bond fund expenses are each approximately normally distributed with equal population variances. Suppose that a random sample of 25 stock funds gives a mean annual expense of 1.15 percent with a standard deviation of 0.31 percent, and that an independent random sample of 25 municipal bond funds finds a mean annual expense of 0.35 percent with a standard deviation of 0.15 percent. Assume that the population standard deviations of expenses are the same for the two types of funds.

Establish a 95% confidence interval to estimate the difference in the population means between the stock and municipal bond funds.

Test ?":?% − ?' ≤ 0.50 against ?,:?% − ?' > 0.50 at the 5% level of significance.

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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