To Estimate the Ratio of the Population Variances of the Monthly

question 43

Short Answer

To estimate the ratio of the population variances of the monthly closing stock prices (in $)of two emerging market funds,following summary measures are obtained using the sample data for 8 months.The two samples are drawn independently from normally distributed populations.
Emerging market fund 1: = 18.65, = 0.47,and n₁ = 8
Emerging market fund 2: = 17.95, = 0.24,and n₂ = 8
Construct a 90% interval estimate of the ratio of the population variances.

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Definitions:

Retained Earnings

The cumulative amount of net income kept within a company after dividends are paid, reinvested in the business or used to pay off debt.

Net Income

The total earnings of a company after subtracting all expenses, including taxes and operating costs, from its total revenues, indicating the company’s profit.

Dividends

A portion of a company’s earnings distributed to its shareholders as a reward for their investment.