A Bond Analyst Is Analyzing the Interest Rates for Equivalent $\alpha = 0.05$

question 4

Multiple Choice

A bond analyst is analyzing the interest rates for equivalent municipal bonds issued by two different states. At $\alpha = 0.05$ , is there enough evidence to conclude that there is a difference in the interest rates paid by the two states?
$\begin{array}{lcc}\hline & \text { State A } & \text { State B } \\\hline \text { Sample size } & 60 & 40 \\\text { Mean interest rate (\%) } & 3.5 & 3.9 \\\text { Population variance } & 0.02 & 0.04 \\\hline\end{array}$

• A) No, because the test value \(- 0.02\) is inside the critical region \(- 1.96 < z < 1.96\)
• B) Yes, because the test value \(120.00\) is outside the critical region \(- 1.96 < z < 1.96\)
• C) Yes, because the test value \(- 3.00\) is outside the critical region \(- 1.96 < z < 1.96\)
• D) Yes, because the test value \(- 10.95\) is outside the critical region \(- 1.96 < z < 1.96\)

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