Investment advisors and brokers are able to offer investment advice to individua

Question

Investment advisors and brokers are able to offer investment advice to individuals and institutions. However, there are two competing standard in the industry. It is believed that financial advisors based on the suitability standard would charge a higher fee than those who are based on the fiduciary standard. Suppose that a random sample of advisors based on the suitability standard charge a 1% fee and a random sample of advisors based on the fiduciary standard only charge 0.5% fee. What type of hypothesis test should be used to see if the two groups of advisors are different?

Explanation / Answer

We would use 2 proportion test to test if the two proption are significantly different or not.

null hypothesis : there is no difference in the proportion of fees charged.

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