Problem 12

Rates of return (annualized) in two investment portfolios are compared over the last 12 quarters. They are considered similar in safety, but portfolio B is advertised as being "less volatile." (a) At a = .025, does the sample show that portfolio A has significantly greater variance in rates of return than portfolio B? (b) At a = .025, is there a significant difference in the means? Portfolio APortfolio B 5.10 9.09 11. 07 8.59 12.60 7.50 4.11 6.20 5.55 7.90 8.79 7.03 7.75 7. 67 9.71 7. 68 9. 61 8. 64 4.87 8. 89 11. 67 7.75 11.34 9.89 (a-1) Choose the appropriate hypotheses. Assume ox" is the variance of the Portfolio A and a" is the variance of the Portfolio B. Ho: GA /On] (a-3) Calculate the test statistic Facts (Round your answer to 2 decimal places.) (a-4) What is your conclusion? We the null hypothesis. (b-1) Choose the appropriate hypotheses. Assumed = company assessed value - employee assessed value. multiple choice 3 Ho: M1 - (2 = 0 vs. Hi: H - 1: # 0 Ho: MI - (3 2 0 vs. HI: HI - H: =0 O Ho: M - us = 0 vs. Hi: MI - > > 0 (b-2) State the decision rule for 0.025 level of significance. (Use the quick rule for the degree of freedom. Round your answers to 3 decimal places. A negative value should be indicated by a minus sign.) Reject the null hypothesis if tooas