The Sampling Distribution of the Ratio of Two Sample Variances

question 49

Multiple Choice

The sampling distribution of the ratio of two sample variances is said to be F -distributed provided that:

• A)the samples are independent from any distributions.
• B)the populations are normal with equal variances.
• C)the samples are matched and their sizes are large.
• D)the samples are independently drawn from two normal populations.

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Definitions:

Capital Rationing

The process of selecting profitable projects to invest in, limited by the availability of funds.

NPV

Net Present Value, a financial metric used to evaluate the profitability of an investment, considering the time value of money.

Mutually Exclusive

Events or decisions that cannot occur or be taken simultaneously; selecting one option precludes the choice of the other.

Profitability Index

A financial metric used to evaluate the desirability of an investment or project, calculated as the present value of future cash flows divided by the initial investment cost.