Anderson is considering to invest in two stocks X and Y. He has sampled the monthly returns (%) of the stocks as shown in the table.

X % 8.8 9.6 8.4 9.0 8.3 9.2 9.0 8.7 8.5 9.4 Y % 9.2 9.4 8.9 9.6 9.7 8.4 8.8 8.9 9.0 9.7

If the stock returns are normally distributed and the two samples are independent, answer the following questions assuming =5%. (Note: State the hypotheses and report the p-value of the underlying test statistic used in each question.)

(a) Using the variance as a measure of risk, test if stock X is less risky than stock Y.

(2 marks)

(b) Test if the expected return of stock X is lower than that of stock Y.

Only answers needed no need for working out.