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Nike’s total revenues (in millions of $) for the Asian and Latin American region

ID: 3353918 • Letter: N

Question

Nike’s total revenues (in millions of $) for the Asian and Latin American regions for the years 2005 through 2009 are as follows. Let the revenues in Asia and Latin America represent population 1 and population 2, respectively.

a.

Specify the competing hypothesis in order to test whether the variance in revenues is greater in Asia than in Latin America.

b.

Use Excel to calculate the value of the test statistic. Remember to put the larger value for sample variance in the numerator. (Round your answer to 2 decimal places.)

Nike’s total revenues (in millions of $) for the Asian and Latin American regions for the years 2005 through 2009 are as follows. Let the revenues in Asia and Latin America represent population 1 and population 2, respectively.

Explanation / Answer

The statistical software output for this problem is:

Two sample variance hypothesis test:
12 : Variance of Asia
22 : Variance of Latin America
12/22 : Ratio of two variances
H0 : 12/22 = 1
HA : 12/22 > 1

Hypothesis test results:

Hence,

a) Hypotheses: H0: 12 / 22 = 1, HA: 12 / 22 1

Option A is correct.

b) Test statistic = 6.78

Ratio Num. DF Den. DF Sample Ratio F-Stat P-value 12/22 4 4 6.7799722 6.7799722 0.0453
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