SOLUTION: 3. A financial planner wants to compare the yield of income and growth oriented mutual funds. Fifty thousand dollars is invested in each of a sample of 35 income-oriented and 40 gr

Question 334296: 3. A financial planner wants to compare the yield of income and growth oriented mutual funds. Fifty thousand dollars is invested in each of a sample of 35 income-oriented and 40 growth-oriented funds. The mean increase for a two year period for the income funds is $1,100 with a standard deviation of $45. For the growth-oriented funds the mean increase is $1,090 with a standard deviation of $55. At the 0.01 significance level is there a difference in the mean yield of the two funds?
Hint: Test of two population means based upon two large samples.
Test statistic:

Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
A financial planner wants to compare the yield of income and growth oriented mutual funds. Fifty thousand dollars is invested in each of a sample of 35 income-oriented and 40 growth-oriented funds. The mean increase for a two year period for the income funds is $1,100 with a standard deviation of $45. For the growth-oriented funds the mean increase is $1,090 with a standard deviation of $55. At the 0.01 significance level is there a difference in the mean yield of the two funds?
Hint: Test of two population means based upon two large samples.
--------
I ran a 2-Sample Ttest on a TI calculator and got the following:
---
Ho: u1-u2 = 0
Ha: u1-u2 is not equal to 0
-----------
Test statistic: t = 0.8655
p-value: 0.3896
df=72.6950
------
Since the p-value is greater than 1%, fail to reject Ho.
The yield's are statistically equal at the 1% significance level.
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Cheers,
Stan H.

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