A Bond Analyst Is Analyzing the Interest Rates for Equivalent $\ddagger = .05$

question 37

Multiple Choice

A bond analyst is analyzing the interest rates for equivalent provincial bonds and Canada bonds. At $\ddagger = .05$ , is there a difference in the interest rates paid?
$\begin{array}{|l|c|c|}\hline & \text { Canada bonds } & \text { Provincial bonds } \\\hline \text { Sample size } & 80 & 40 \\\hline \text { Mean interest rate }(\%) & 3.9 & 4.15 \\\hline \text { Sample variance } & 0.01 & 0.03 \\\hline\end{array}$

• A) Yes, because the test value -8.45 is outside the interval (-1.96, 1.96)
• B) Yes, because the test value -2.86 is outside the interval (-1.96, 1.96)
• C) Yes, because the test value 71.43 is outside the interval (-1.96, 1.96)
• D) No, because the test value -0.03 is inside the interval (-1.96, 1.96)

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