Question

A study found that, during four years of price competition, variation in shares of a company was $ 114.09. But, in the following seven years, in which there was a change in economic policies of the government, this variance was of $16.08. Assuming the data as random samples independent of two normal populations. Is possible to affirm that the variation of the shares in the period of economic policy change is longer that in the period in which there were none?

Answer 1

The test statistic F =

                            

                             = 7.095

At 0.05 significance level, the critical value is F(0.95, 3, 6) = 0.1118

Since the test statistic value is not less than the critical value(7.095 > 0.1118), so we should not reject H₀.

At 0.05 significance level, there is not sufficient evidence to conclude that the variation of the shares in the period of economic policy changes is longer that in the period in which there were none.