Rates of return (annualized) in two investment portfolios are compared over the last 12 quarters. They are considered similar in safety, but portfolioBis advertised as being "less volatile." (a) At= .025, does the sample show that portfolioAhas significantly greater variance in rates of return than portfolioB? (b) At= .025, is there a significant difference in the means?

Portfolio A 5.30 10.85 12.46 4.28 5.63 8.71 7.89 9.71 9.53 4.98 11.61 11.40

Portfolio B 8.98 8.58 7.55 6.34 7.68 7.17 7.70 7.67 8.67 8.93 7.67 9.89

1.Choose the appropriate hypotheses. Assume_A²is the variance of the Portfolio A and_B²is the variance of the Portfolio B.

multiple choice 1

• H₀:_A²/_B² 1 versusH₁:_A²/_B²> 1
• H₀:_A²/_B²= 1 versusH₁:_A²/_B² 1
• H₀:_A²/_B² 1 versusH₁:_A²/_B²< 1

2.Specify the decision rule.(Round your answer to 2 decimal places.)

Reject the null hypothesis ifF_calc>.

3.Calculate the test statisticF_calc

4.State the decision rule for 0.025 level of significance.

Reject the null hypothesis ift_calct_calc>.

5.Find the test statistict_calc.