A financial analyst is comparing the performance of two investment portfolios, Portfolio A and Portfolio B. The
Fantastic news! We've Found the answer you've been seeking!
Question:
A financial analyst is comparing the performance of two investment portfolios, Portfolio A and Portfolio B. The analyst collects data on the annual returns of both portfolios for the past five years and wants to determine if there is a significant difference in the mean annual returns of the two portfolios. The data is summarized in the following table:
Portfolio | Sample size | Sample mean | Sample standard deviation |
---|---|---|---|
A | 5 | 10.2% | 2.3% |
B | 5 | 8.8% | 1.8% |
Assuming that the annual returns of both portfolios follow a normal distribution, perform a hypothesis test to determine if there is a significant difference in the mean annual returns of the two portfolios at a 5% level of significance. Show all calculations and clearly state your conclusion.
Related Book For
Statistics For Business Decision Making And Analysis
ISBN: 9780321890269
2nd Edition
Authors: Robert Stine, Dean Foster
Posted Date: