A Financial Planner Wants to Compare the Yield of Income

question 79

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 p-value for the computed test statistic?

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Definitions:

Hering's Theory

A theory in color vision proposing that the visual system interprets color in terms of opposing pairs: blue-yellow, red-green, and black-white.

Volley Principle

A theory explaining how auditory nerve cells collectively respond to sounds of high frequency by firing in rapid succession, allowing for the perception of pitch in the auditory system.

All Cones

A condition referring to the photoreceptor cells in the retina responsible for color vision; typically used to discuss scenarios involving full color perception.

Mostly Rods

Refers typically to areas in the human retina that are densely populated with rod cells, which are more numerous than cone cells and are responsible for night vision.