Fidelity Magellan is a large cap growth mutual fund and Fidelity Small Cap Stock is a small cap growth mutual fund (Morningstar Funds 500, 2006). The standard deviation for both funds was computed based on a sample of size 26. For Fidelity Magellan, the sample standard deviation is 8.89%; for Fidelity Small Cap Stock, the sample standard deviation is 13.03%. Financial analysts often use the standard deviation as a measure of risk. Conduct a hypothesis test to determine whether the small cap growth fund is riskier than the large cap growth fund. Use α = .05 as the level of significance.
Answer to relevant QuestionsA research hypothesis is that the variance of stopping distances of automobiles on wet pavement is substantially greater than the variance of stopping distances of automobiles on dry pavement. In the research study, 16 ...City Trucking, Inc., claims consistent delivery times for its routine customer deliveries. A sample of 22 truck deliveries shows a sample variance of 1.5. Test to determine whether H0: σ2 < 1 can be rejected. Use α = .10. Two new assembly methods are tested and the variances in assembly times are reported. Use α = .10 and test for equality of the two population variances. One of the questions on the BusinessWeek Subscriber Study was, "In the past 12 months, when traveling for business, what type of airline ticket did you purchase most often?" The data obtained are shown in the following ...The following data are believed to have come from a normal distribution. Use the goodness of fit test and α = .05 to test this claim.
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