SCENARIO 10-15
The table below presents the summary statistics for the starting annual salaries (in thousands of dollars)for individuals entering the public accounting and financial planning professions.
Sample I (public accounting):

Test whether the mean starting annual salaries for individuals entering the public accounting professions is higher than that of financial planning assuming that the two population variances are the same.
-Referring to Scenario 10-15,suppose α = 0.05.Which of the following represents the correct conclusion for a test on a difference in the variances?
A)There is no evidence of a difference in the variances.
B)There is evidence of a difference in the variances.
C)There is no evidence that the variances are the same.
D)There is evidence that variances are the same.

Question

SCENARIO 10-15
The table below presents the summary statistics for the starting annual salaries (in thousands of dollars)for individuals entering the public accounting and financial planning professions.
Sample I (public accounting):

Test whether the mean starting annual salaries for individuals entering the public accounting professions is higher than that of financial planning assuming that the two population variances are the same.
-Referring to Scenario 10-15,suppose α = 0.05.Which of the following represents the correct conclusion for a test on a difference in the variances?
A)There is no evidence of a difference in the variances. 
B)There is evidence of a difference in the variances. 
C)There is no evidence that the variances are the same. 
D)There is evidence that variances are the same.

Quizplus · Accepted Answer

To test for equality of variances, we use the F-test. Under the assumption that the sample variances are drawn from populations with equal variances, we compute the F-statistic as the ratio of the sample variances (larger variance divided by the smaller variance). In this case, we have F = 60.35/58.20 = 1.04, which is less than the critical value for the F-distribution with (n1-1) = (n2-1) = 12 degrees of freedom at α = 0.05. Therefore, we fail to reject the null hypothesis that the population variances are equal and conclude that there is no evidence of a difference in the variances.

SCENARIO 10-15 The Table Below Presents the Summary Statistics for the Starting