Question

Data were collected on the top 1,000 financial advisers. Company A had 239 people on the list and another company, Company B, had 121 people on the list. A sample of 16 of the advisers from Company A and 10 of the advisers from Company B showed that the advisers managed many very large accounts with a large variance in the total amount of funds managed. The standard deviation of the amount managed by advisers from Company A was

s₁ = $585 million.

The standard deviation of the amount managed by advisers from Company B was

s₂ = $484 million.

Conduct a hypothesis test at

α = 0.10

to determine if there is a significant difference in the population variances for the amounts managed by the two companies. What is your conclusion about the variability in the amount of funds managed by advisers from the two firms?

Find the p-value. (Round your answer to four decimal places.)

Answer 1

P value :

With F = 1.46 , df = ( 15,9)

we get p value = 0.2878

Decision :

P value > l.o.s

0.2878 > 0.10

so fail to reject H0

Conclusion ;

At alpha = 0.10 l.o.s there is no significant difference in the population variances for the amounts managed by the two companies.

Note : If we round f to three decimals i,.e., f = 1.461 we get p value = 0.2874 so round according to your answer