The Chartered Financial Analyst (CFA) designation is fast becoming a requirement for serious investment professionals. It is an attractive alternative to getting an MBA for students wanting a career in investment. A student of finance is curious to know if a CFA designation is a more lucrative option than an MBA. He collects data on 46 recent CFAs with a mean salary of $141,000 and a standard deviation of $55,000. A sample of 48 MBAs results in a mean salary of $134,000 with a standard deviation of $23,000.

Assume that ₁ is the population mean for individuals with a CFA designation and ₂ is the population mean of individuals with MBAs. (You may find it useful to reference the appropriate table: z table or t table)

a. Set up the hypotheses to test if a CFA designation is more lucrative than an MBA at the 10% significance level.

multiple choice 1

• H₀: _{1 2} = 0; H_A: _{1 2} 0

• H₀: _{1 2} 0; H_A: _{1 2} < 0

• H₀: _{1 2} 0; H_A: _{1 2} > 0

b-1. Calculate the value of the test statistic. Do not assume that the population variances are equal. (Round all intermediate calculations to at least 4 decimal places and final answer to 2 decimal places.)

b-2. Find the p-value.

multiple choice 2

• p-value
  0.10
• 0.05
  p-value < 0.10
• 0.025
  p-value < 0.05
• 0.01
  p-value < 0.025

• p-value < 0.01

c. At the 10% significance level, is a CFA designation more lucrative than an MBA?