Page 50 - 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.298/299
Example: Chi-square test for a single population variance: Historically, HREF has advertised that its monthly returns
have a SD = 4% (based on estimates from the 1990–1998). HREF wants to verify whether this claim still adequately
describes the SD. HREF collected monthly returns for the 24-month period between 1998 and 2000 and measured a SD
of monthly returns of 3.8%. Is the more recent SD different from the one advertised?
