Page 54 - 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.301
Example: F-test for equal variances: Annie is examining the earnings for two different industries, suspecting
that the earnings of the textile industry are more divergent than those of the paper industry. To confirm this,
she took a sample of 31 ‘textile’ and 41 ‘paper’ companies, and measured the sample SD of earnings across
the ‘textile industry’ to be $4.30 and ‘paper industry’ to be $3.80.
At 5% SL, do the textile industry earnings have a greater SD than those of the paper industry?
First, lets
evaluate the F
tables! P.
348/349
