Test Scores on a Standardized Test from Samples of Students

question 38

Short Answer

Test scores on a standardized test from samples of students from two universities are given below. ​
Provide a 98% confidence interval estimate for the difference between the mean test scores of the two universities.

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Definitions:

Relative Value Strategy

An investment strategy that seeks to identify and exploit differences in the price or rate of securities, often aiming to profit from discrepancies in relative valuation rather than absolute price movements.

On-The-Run Bonds

The most recent issue of a government bond, usually more liquid and yielding slightly less interest compared to older ('off-the-run') bonds.

Nearly Identical Duration

A characteristic of two or more financial instruments whose cash-flows occur over a similar time frame, making their sensitivity to interest rate changes similar.

Hedge Fund Fee Structure

The compensation arrangement between hedge funds and their managers, typically involving a management fee plus a performance fee based on the fund's returns.