Annual growth rates for individual firms in the toy industry tend to fluctuate dramatically, depending on consumers'

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Annual growth rates for individual firms in the toy industry tend to fluctuate dramatically, depending on consumers'

tastes and current fads. Consider the following growth rates

(in percent) for two companies in this industry, Hasbro and Mattel.

Year 2005 2006 2007 2008 2009 Hasbro 3.0 2.1 21.8 4.8 1.2 Mattel 1.5 9.1 5.7 – 0.1 – 8.2 Source: Annual Reports for Hasbro, Inc. and Mattel, Inc.

a. State the null and the alternative hypotheses in order to determine if the variance of growth rates differs for the two firms.

b. What assumption regarding the population is necessary to im plem ent this step?

c. Specify the critical value(s) at α = 0.05.

d. What is your conclusion? P-399

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