Page 26 - FINAL CFA I SLIDES JUNE 2019 DAY 4
P. 26
Session Unit 3:
12. Hypothesis Testing
LOS 12.h: Identify the appropriate TS and interpret the results for a HT concerning the equality of the population means
of 2 at least approximately NDPs, based on independent random samples with:
1) equal variances;
2) unequal assumed variances, p. 288
E.G Compare the means of two populations: returns from long-term debt vs equity?
Draw independent samples from both normally distributed populations, then assume: 2
Scenarios!
Population variances unknown but assumed to be equal Population variances unknown but assumed to be unequal,
Use pooled variance….
The denominator (SE) is individual
sample variances for each sample.
Add/average the variances of the 2 sample
means to get SE in the denominator.
