Page 22 - 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 the sample means are very close together, the numerator (and the t-

statistic itself) are small, and we do not reject equality..

• If the sample means are far apart, the numerator (and the t-statistic

itself) are large, and we reject equality.