Page 27 - FINAL CFA I SLIDES JUNE 2019 DAY 4

Session Unit 3:

12. Hypothesis Testing

What to note? Don’t worry about formula -p289!?

• These are t-statistics - only valid for 2 populations that are
independent and normally distributed

• Variance of the pooled sample is used when the sample

variances are assumed to be equal.

• Formula Numerator:

• If sample means are very close, the numerator (and the t-statistic itself)

are small, and we Fail to Reject Equality..

• Otherwise, Reject equality.