Independent sample t test for financial planner
Paired t test comparing the means of two populations
July 9, 2019Independent sample t test for comparing means
July 9, 20191. A financial planner wants to compare the yield of income- and growth-oriented mutual funds. Fifty thousand dollars is invested in each of a sample of 35 income-oriented and 40 growth-oriented funds. The meanincrease for a two-year period for the income funds is $1100 with a standard deviationof $45. For the growth‑oriented funds the mean increase is $1090 with a standard deviation of $55. At the 0.01 significance level is there a difference in the mean yield of the two funds?
a. State the null and alternate hypotheses.
H0:
H1:
b. State the decision rule.
c. Compute the value of the test statistic.
d. Compute the p-value.
e. What is your decision regarding the null hypothesis?
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A financial planner wants to compare the yield of income- and growth-oriented mutual funds. Fifty thousand dollars is invested in each of a sample of 35 income-oriented and 40 growth-oriented funds. The mean increase for a two-year period for the income funds is $1100 with a standard deviation of $45. For the growth oriented funds the mean increase is $1090 with a standard deviation of $55. At the 0.01 …
This solution provides a step by step method for the calculation of the t statistic. The formula for the calculation and interpretations of the results are also included.
