2. As a financial analyst for a brokerage firm, you found that the mean return for a random sample of 38 stocks listed on the main board of Kuala Lumpur Stock Exchange (KLSE) was 12.6 per cent with a standard deviation of 3.9 per cent. Meanwhile, the mean return for a random sample of 44 stocks listed on the second board of KLSE was 10.9 percent with a standard deviation of 3.5 percent.

Suppose the returns for all stocks on both boards are normally distributed with the same variance. At 10% significance level, you want to test whether the mean returns of all stocks listed on the main board are higher than the mean returns of all stocks listed on the second board.

Which of the following is your findings?

Pooled estimate of the population variance = 13.619 critical value = 1.785 t-stat = 8.21 t-stat = 5.08 There is not enough statistical evidence that the mean returns of all stocks listed on the main board are higher than the mean returns of all stocks listed on the second board.