Consider the expected returns (in percent)from the two investment options.Beth claims that the variances of the returns for the two investments differ.Use the following data to arrive at the results. Which of the following is the correct p-value?
A) 0.2873
B) 0.7127
C) 0.3564
D) 0.6436

Question

Consider the expected returns (in percent)from the two investment options.Beth claims that the variances of the returns for the two investments differ.Use the following data to arrive at the results.  Which of the following is the correct p-value?
A) 0.2873 
B) 0.7127 
C) 0.3564 
D) 0.6436

Quizplus · Accepted Answer

We can use a two-sample t-test to test if the means of the two populations are different. Using excel, we get a t-value of -0.388 and a two-tailed p-value of 0.713. Since the p-value is greater than 0.05, we fail to reject the null hypothesis that the means are equal. Therefore, there is not enough evidence to support Beth's claim that the variances are different. The best choice is option B because it has the correct p-value.

Consider the Expected Returns (In Percent)from the Two Investment Options