A Financial Planner Wants to Compare the Yield of Income

question 90

Essay

A financial planner wants to compare the yield of income and growth mutual funds. Fifty thousand dollars is invested in each of a sample of 35 income and 40 growth funds. The mean increase for a two-year period for the income funds is $900. For the growth funds, the mean increase is $875. Income funds have a sample standard deviation of $35; growth funds have a sample standard deviation of $45. Assume that the population standard deviations are equal. At the 0.05 significance level, is there a difference in the mean yields of the two funds?
What is the null hypothesis?

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Definitions:

Complex

Consisting of many different and connected parts, often referring to a group of buildings or facilities located close to each other.

Gizeh

An alternate spelling for Giza, a city in Egypt that is part of the Greater Cairo metropolis, known for the Giza Plateau, site of the iconic Pyramids and the Sphinx.

Portrait

An artistic representation of a person, in which the face and its expression are predominant, intended to display the likeness, personality, and even the mood of the subject.

Mentuemhet

A prominent Theban official during the Twenty-sixth Dynasty of Egypt, known for his extensive building projects and statues.