KASEY CORNISH PROBLEM An investor wants to invest his money in a fund which has
ID: 2932368 • Letter: K
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KASEY CORNISH PROBLEM An investor wants to invest his money in a fund which has maintained a steady value. A fuand manager claims that one of his bond funds has maintained an average price of $19.00 with a variance of 0.15. In order to find out if the fund managers claim is true, the investor samples the prices from 18 random days and finds a standard deviation of 0.3324 in the price. Can the investor conchude that the varlance of the share price of the beesd fund is diferent dan claimed at -0.05? Assume the population is normally dis trbuted. VALUE OF THE TESTSTATISTIC Enter the value of the test statistic. Round your answer to three decimal places. Previous step answers 5 6Explanation / Answer
Below are null and alternate hypothesis,
H0: sigma2 = 0.15
H1: sigma2 not equals to 0.15
Test statistics, T = (N-1)*(s/sigma)^2 = (18 - 1) * (0.3324^2/0.15) = 12.52
Critical values of statistics are 7.56 and 30.19
As Test statistics value does not lie beyond critical values i.e. T is not less than 7.56 or T is not greater than 30.19, we fail to reject null hypothesis.
This means there are not sufficient evidence to conclude that the variance is different from 0.15
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