SCENARIO 10-15
the Table Below Presents the Summary Statistics for the Starting

question 161

Multiple Choice

SCENARIO 10-15
The table below presents the summary statistics for the starting annual salaries (in thousands of
dollars) for individuals entering the public accounting and financial planning professions. Sample I (public accounting) : $\bar { X } _ { 1 } = 60.35 , S _ { 1 } = 3.25 , n _ { 1 } = 12$
Sample II (financial planning) : $\bar { X } _ { 2 } = 58.20 , S _ { 2 } = 2.48 , n _ { 2 } = 14$ Test whether the mean starting annual salaries for individuals entering the public accounting
professions is higher than that of financial planning assuming that the two population variances are
the same.
-Referring to Scenario 10-15, suppose ? = 0.05. Which of the following represents the result of the test on a difference in the variances?

• A) The alternative hypothesis is rejected.
• B) The null hypothesis is rejected.
• C) The null hypothesis is not rejected.
• D) Insufficient information exists on which to make a decision.

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Definitions:

Compound Interest

Interest that accrues on the principal amount as well as on the accrued interest from earlier periods, for either a deposit or a loan.

Simple Interest Rate

The percentage of interest paid on the original principal amount of a loan or investment, not compounding over time.

Compound Interest

Interest on both the initial principal and the accumulated interest from previous periods on a deposit or loan.

Rates of Return

Financial returns or setbacks on an investment throughout a chosen timeframe, indicated as a percentage of the investment's original expenditure.