Question

The Chartered Financial Analyst (CFA) designation is fast becoming a requirement for serious investment professionals. It is an attractive alternative to getting an MBA for students wanting a career in investment. A student of finance is curious to know if a CFA designation is a more lucrative option than an MBA. He collects data on 32 recent CFAs with a mean salary of $130,000 and a standard deviation of $53,000. A sample of 47 MBAs results in a mean salary of $129,000 with a standard deviation of $23,000. Assume that is the population mean for individuals with a CFA designation and uz is the population mean of individuals with MBAs. (You may find it useful to reference the appropriate table: z table or t table) a. Set up the hypotheses to test if a CFA designation is more lucrative than an MBA at the 1% significance level. Ho: 41 - 42 = 0; HA: 41 - 4200 HO: 41 - 4220; HA: 111 - H2<0 HO: 11 - 12 50; HA: 111 - H2>0 b-1. Calculate the value of the test statistic. Do not assume that the population variances are equal. (Round all intermediate calculations to at least 4 decimal places and final answer to 2 decimal places.) Test statistic

Answer 1

The statistical software output for this problem is :  

Two sample T summary hypothesis test: 11: Mean of Population 1 H2 : Mean of Population 2 H1 - H2 : Difference between two means H:H1 - H2 = 0 HAH1 - H2> 0 (without pooled variances) Hypothesis test results: Difference Sample Diff. Std. Err. DF T -Stat H1 - 2 1000 9951.7119 39.026903 0.10048522 P-value 0.4602

(a)

Option is correct

(b-1)

3) Test statistics = 0.10

(b-2)

P-value $\geq$ 0.10

(c)

fail to reject , can not