leiyou

 

The correct answer is D

The F test is used to test the differences of variance between two samples.

leiyou

 

2、Abby Ness is an analyst for a firm that specializes in evaluating firms involved in mineral extraction. Ness believes that the earnings of copper extracting firms are more volatile than those of bauxite extraction firms. In order to test this, Ness examines the volatility of returns for 31 copper firms and 25 bauxite firms. The standard deviation of earnings for copper firms was $2.69, while the standard deviation of earnings for bauxite firms was $2.92. Ness’s Null Hypothesis is σ12 = σ22. Based on the samples, can we reject the null hypothesis at a 95% confidence level using an F-statistic and why? Null is:

A) rejected. The F-value exceeds the critical value by 0.71.

B) rejected. The F-value exceeds the critical value by 0.849.

C) not rejected. The critical value exceeds the F-value by 0.194.

D) not rejected. The critical value exceeds the F-value by 0.71.

leiyou

 

The correct answer is D

F = s12 / s22 = $2.922 / $2.692 = 1.18

From an F table, the critical value with numerator df = 24 and denominator df = 30 is 1.89.

leiyou

 

3、Two samples were drawn from a normally distributed population. For the first sample, the mean was $50, and the standard deviation was $5. For the second sample, the mean was $55, and the standard deviation was $6. The first sample consists of 25 observations, and the second sample consists of 36 observations. (Note: In the following questions, the subscripts “1” and “2” indicate the first and second sample, respectively.)

Consider the hypotheses structured as H0: μ1 = $48 versus Ha: μ1 ≠ $48. At a 1 percent level of significance, the null hypothesis:

A) cannot be rejected.

B) should be rejected.

C) should neither be rejected nor fail to be rejected.

D) cannot be tested using this sample information provided.

leiyou

 

AIM 16: Define, calculate and interpret the chi-squared test of significance.

1、You have collected monthly returns for a mutual fund and want to test the null hypothesis that the standard deviation exceeds the advertised standard deviation of 3.5 percent. The most appropriate test statistic is based on a:

A) F-test.

B) t-test.

C) chi-square test.

D) z-test.

leiyou

 

The correct answer is C

The chi-square test is used to test hypotheses about a single population variance.

leiyou

 

2、The sampling distribution of variances is described by which distribution?

A) Chi-square distribution. 

B) Normal distribution. 

C) Student’s t-distribution. 

D) F-distribution.

leiyou

 

The correct answer is A

The sampling distribution of variances is described by the chi-square distribution.

leiyou

 

AIM 17: Define, calculate and interpret the F-test of significance.

1、In order to test if Stock A is more volatile than Stock B, prices of both stocks are observed to construct the sample variance of the two stocks. The appropriate test statistics to carry out the test is the:

A) t test.

B) Z test.

C) Chi-square test.

D) F test.

leiyou

 

9、A Type I error:

A) rejects a false null hypothesis.

B) fails to reject a false null hypothesis.

C) fails to reject a true null hypothesis.

D) rejects a true null hypothesis.