State the null and alternate hypotheses

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A stockbroker at Cyprus international reported that the mean rate of return on a sample of 10 oil stocks was 12.6% with a standard deviation of 3.9%. The mean rate of return on a sample of 8 utility stocks was 10.9% with a standard deviation of 3.5%.

At the 0.05 significance level, can we conclude that there is more variation in the oil stocks?

a. State the null and alternate hypotheses.

H0: σ12 = σ22 and H1: σ12 ≠ σ22

b. State the decision rule. (Round your answer to 2 decimal places.)

c. Compute the value of the test statistic. (Round your answer to 2 decimal places.)

d. Compute the p-value. (Round your answer to 4 decimal places.)

e. What is your decision regarding H0?

f. Interpret the result.

Reference no: EM132968386

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