An investor claims that the variability between the two-year return rates of different mutual funds is greater than when she began investing. Refer to the two-year return column in Data Set 10 in Appendix B. If the two-year return rates for different funds had a standard deviation of 10.11 when she began investing, test the claim that the current standard deviation for two-year return rates (σ = 12.845) is greater. Use the 0.01 level of significance.
Use the traditional method to test the given hypotheses. Follow the steps outlined in Figure 7-4, and draw the appropriate graph. In all cases, assume that the population is normally distributed and that the sample has been randomly selected.