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Case Two 2

# Case Two 2 - Statistical Analysis 1 Use the EMC and the...

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Unformatted text preview: Statistical Analysis 1. Use the EMC and the CSCO closing prices as two independent variables. Test the hypothesis that the variations in EMC closing prices ( 2 1 σ ) and the CSCO closing prices ( 2 2 σ ) are equal against the alternative hypothesis that they are not equal. That is test the hypothesis that H : 2 2 2 1 σ σ = against the alternative hypothesis that H 1 : 2 2 2 1 σ σ ≠ . Use 5% level of significance. Use p-value approach and show all six steps. Step 1: H 2 1 σ = 2 2 σ against H 1 : 2 1 σ ≠ 2 2 σ Step 2: α =.05 Step 3: n 1 = 20 sample size for EMC n 2 = 25 sample size for CSCO 1 s = 0.277 for EMC 2 s = 1.166 for CSCO Step 4: Test statistic: F= 2 2 2 1 s s = .056 Step 5: P-Value is 3.14541E-8 ≈0 Step 6: P-Value is < α so we Reject H 2. Use the EMC and the CSCO closing prices and test the hypothesis that the average closing price of EMC ( 1 μ ) and CSCO ( 2 μ ) are equal against the alternative hypothesis that they are not equal. Use 5% level of significance. Use either case 1: 2 2 2 1 σ σ = or case 2: 2 2 2 1 σ σ ≠ based on the results of question 1. Use p-value approach and show all six steps....
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Case Two 2 - Statistical Analysis 1 Use the EMC and the...

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