document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=416510>Question 416510</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Fidelity Magellan is a large cap growth mutual fund and Fidelity Small Cap Stock is a small cap growth mutual fund. The standard devitation for both funds was computed based on a sample of size 26. For Fidelity Magellan, the sample standard deviation is 8.89%; for Fidelity Small Cap Stock, the sample standard deviation is 13.03. Financial analysts often use the standard deviation as a measure of risk. Conduct a hypothesis test to determine whether the small cap growth fund is risckier than the large cap growth fund. Use a = .05 as the level of significance. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #291866 by </B><A HREF=/tutors/aboutme.mpl?userid=stanbon><B>stanbon(75887)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=stanbon><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=291866\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Fidelity Magellan is a large cap growth mutual fund and Fidelity Small Cap Stock is a small cap growth mutual fund. <BR>\n" );
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document.write( "The standard devitation for both funds was computed based on a sample of size 26. <BR>\n" );
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document.write( "For Fidelity Magellan, the sample standard deviation is 8.89% (sig2) ; for Fidelity Small Cap Stock, the sample standard deviation is 13.03% (sig1). <BR>\n" );
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document.write( "Financial analysts often use the standard deviation as a measure of risk. Conduct a hypothesis test to determine whether the small cap growth fund is riskier than the large cap growth fund.<BR>\n" );
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document.write( "Use a = .05 as the level of significance.<BR>\n" );
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document.write( "Ho: sig1-sig2 = 0<BR>\n" );
document.write( "Ha: sig1-sig2 > 0<BR>\n" );
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document.write( "I ran a 2-Sample FTest on a TI-84<BR>\n" );
document.write( "test stat: F = 2.148252<BR>\n" );
document.write( "p-value: 0.030706<BR>\n" );
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document.write( "Conclusion: since the p-value is less than 5%<BR>\n" );
document.write( "Reject Ho.  The small-cap is riskier.<BR>\n" );
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document.write( "Cheers,<BR>\n" );
document.write( "Stan H </SPAN>\n" );
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