An employment information service claims that the standard deviation of the annual salaries for actuaries is less

Question:

An employment information service claims that the standard deviation of the annual salaries for actuaries is less in California than in New York. You select a sample of actuaries from each state. The results of each survey are shown in the figure. At α = 0.05, can you support the service’s claim?

Actuaries in Actuaries in New York California $1 = $37,100 n1 = 41 S2 = $32,400 n2 = 61


(a) Identify the claim and state H0 and Ha

(b) Find the critical value and identify the rejection region, 

(c) Find the test statistic F, 

(d) Decide whether to reject or fail to reject the null hypothesis, and 

(e) Interpret the decision in the context of the original claim. Assume the samples are random and independent, and the populations are normally distributed.

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