Assuming Unequal Variances in a T-Test for a Zero Difference

question 16

Multiple Choice

Assuming unequal variances in a t-test for a zero difference of two means, we would:

• A)sum the degrees of freedom for each sample.
• B)use the larger degrees of freedom for simplicity.
• C)use a complicated formula for the degrees of freedom.
• D)use a z-test to be conservative in the calculation.

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Definitions:

Earnings per Share

A company's profit divided by its number of common outstanding shares.

Weighted-average Shares

A calculation used in financial reporting that adjusts the number of outstanding shares for their time outstanding during the calculation period.

Retained Earnings

Earnings accumulated by a company thus far, after subtracting any dividends or distributions made to shareholders.

Price-earnings Ratio

A valuation metric for companies, representing the ratio of a company's share price to its per-share earnings.