# Homework 8 - Graded Homework 8 You have submitted this...

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Graded Homework 8 You have submitted this Homework 1 time (including this time). You may submit this Homework a total of 40 times and receive full credit. These questions cover hypothesis tests for variances in two populations, material you can find in your course packet on pages 61-64. Question #1 Please refer to example #1 on slide 46 (page 62) of the course packet. A regional fast food chain wants to insure that their customers do not eat meat carrying E.coli bacteria. The preventive measure is to cook the meat at the required temperature. Because of varying patty size and burner temperatures, meats cooked for the same length of time can have different final internal temperatures. The health department is recommending that the newer, digitally controlled burners reduce the variation in the final internal temperatures. There are two models of digitally controlled burners to choose from. The restaurant chain will choose the model with the most consistent final internal temperature of meets cooked. They sample 11 batches of meat cooked by burner model 1, and 13 batches of meat cooked by burner model 2. They found S 1 2 =6.7, and S 2 2 =2.5. Is there a difference in temperature consistency at the 10% level of significance? 1. The appropriate test that the restaurant chain owner would have to perform by is the: f-test for the ratio of variances . 2. What's the value of the appropriate test statistic for this test? 2.68 3. What's the p value for this test? 0.109043655 4. Can the restaurant chain owner conclude at the 5% significance level that variances are unequal? no 5. For a 95% confidence interval, the lower and upper confidence limits are .794417733 = 0.794417733 and 9.704146 respectively. Item 5: Your answer is within ±0.1% of the solution - correct. Item 6: Your answer is within ±0.1% of the solution - correct. You received a raw score of 100% on this question. Question #2 Please refer to example #2 on slide 49 (page 63) of the course packet. The returns of two portfolios were recorded for ten years. Portfolio 1 had a variance

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of returns of 295, while portfolio 2 had a variance of 105. Can we conclude at a 5% level of significance that portfolio 1 is riskier (has a higher variance) than portfolio 2? 1. The test statistic for testing this claim will have the following distribution: o F distribution with 9 and 9 degrees of freedom o Chi-squared distribution with 9 degrees of freedom o F distribution with 10 and 10 degrees of freedom o Chi-squared distribution with 10 degrees of freedom 2. The value of the test statistic for testing the hypothesis is 2.80952381 . 3. The p-value associated with this test statistic is 0.069881665 . 4. Based on your results, what is your conclusion? o
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## This note was uploaded on 04/07/2008 for the course ECON 203 taught by Professor Petry during the Spring '08 term at University of Illinois at Urbana–Champaign.

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Homework 8 - Graded Homework 8 You have submitted this...

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