Author:
Christine Farr

Question 1 (1 point)

Assume that we draw two random samples of students from Coles college of Business. One group includes 10 economics majors and another includes 30 finance majors. From these two groups we obtain the following statistics regarding the performance on the final calculus exam: Economics: the average value is 87, the standard deviation is 9; Finance: the average value is 91, the standard deviation is 5. Please conduct a 90% significance test for the equality of the two population variances and state if such a test would reject or not the null hypothesis that the two variances are equal.

Question 1 options:

Fail to reject the null that the two variances are equal

Reject the null that the two variances are equal

There is no technique to test for equality of variances.

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Question

2 (1 point)

The table below contains daily percentage price changes of two financial assets (GLD - gold ETF, SPY - S&P 500 ETF) between February 2 and 26 of 2016. Can we argue that the two assets are equally volatile? Please conduct a test for the equality of two population variances with 90% significance level and state if the null hypothesis of the equality of the two variances can be rejected.

GLD daily price change (%)

SPY daily price change (%)

-0.687

-0.230

0.264

1.211

0.333

0.458

1.498

-1.263

-1.778

1.448

-0.600

-0.047

2.433

-0.410

0.619

1.633

-3.033

1.688

-0.588

2.062

4.019

-1.301

0.775

-0.086

-0.220

0.005

1.344

-1.346

1.583

-1.905

1.208

0.157

1.073

0.599

0.037

-1.802

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