Page 47 - FINAL CFA SLIDES DECEMBER 2018 DAY 4
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Session Unit 3:
12. Hypothesis Testing
LOS 12.j: Identify the appropriate TS and interpret the results for a HT concerning 1) the variance of a
NDP, and 2) the equality of the variances of 2 NDPs based on 2 independent random samples, p.296
The chi-square, χ2, distribution is asymmetrical and
RECALL? P.153 LOS8.k.
Which is most similar to normal distribution? approaches the Z distribution as dfs increase!
Great for mean/
MCT/(Return) testing!
Variances are never –ve: why?
Can you see chi-square distribution is bounded
Which is better for below by 0, χ2 values cannot be -ve!
dispersion (risk)
testing?
Consider a 2TT with a 5% SL and 30 df.
Can we evaluate χ2 distribution tables,
compared to say t,
and derive χ2 critical values ?
