The Chartered Financial Analyst (CFA) designation is fast becoming a requirement for serious investment professionals. It is an attractive alternative to getting an MBA for students wanting a career in investment. A student of finance is curious to know if a CFA designation is a more lucrative option than an MBA. He collects data on 36 recent CFAs with a mean salary of $145,000 and a standard deviation of $36,000. A sample of 47 MBAs results in a mean salary of $135,000 with a standard deviation of $24,000. Assume that μ1 is the population mean for individuals with a CFA designation and μ2 is the population mean of individuals with MBAs. (You may find it useful to reference the appropriate table: z table or t table) a. Set up the hypotheses to test if a CFA designation is more lucrative than an MBA at the 10% significance level. multiple choice 1 H0: μ1 − μ2 = 0; HA: μ1 − μ2 ≠ 0 H0: μ1 − μ2 ≥ 0; HA: μ1 − μ2 < 0 H0: μ1 − μ2 ≤ 0; HA: μ1 − μ2 > 0 b-1. Calculate the value of the test statistic. Do not assume that the population variances are equal. (Round all intermediate calculations to at least 4 decimal places and final answer to 2 decimal places.) b-2. Find the p-value. multiple choice 2 0.05 p-value < 0.10 0.025 p-value < 0.05 0.01 p-value < 0.025 p-value < 0.01 p-value 0.10 c. At the 10% significance level, is a CFA designation more lucrative than an MBA?
The Chartered Financial Analyst (CFA) designation is fast becoming a requirement for serious investment professionals. It is an attractive alternative to getting an MBA for students wanting a career in investment. A student of finance is curious to know if a CFA designation is a more lucrative option than an MBA. He collects data on 36 recent CFAs with a mean salary of $145,000 and a standard deviation of $36,000. A sample of 47 MBAs results in a mean salary of $135,000 with a standard deviation of $24,000.
Assume that μ1 is the population mean for individuals with a CFA designation and μ2 is the population mean of individuals with MBAs. (You may find it useful to reference the appropriate table: z table or t table)
a. Set up the hypotheses to test if a CFA designation is more lucrative than an MBA at the 10% significance level.
multiple choice 1
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H0: μ1 − μ2 = 0; HA: μ1 − μ2 ≠ 0
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H0: μ1 − μ2 ≥ 0; HA: μ1 − μ2 < 0
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H0: μ1 − μ2 ≤ 0; HA: μ1 − μ2 > 0
b-1. Calculate the value of the test statistic. Do not assume that the population variances are equal. (Round all intermediate calculations to at least 4 decimal places and final answer to 2 decimal places.)
b-2. Find the p-value.
multiple choice 2
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0.05p-value < 0.10
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0.025p-value < 0.05
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0.01p-value < 0.025
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p-value < 0.01
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p-value0.10
c. At the 10% significance level, is a CFA designation more lucrative than an MBA?
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