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REVISION QUESTIONS 1. An investor wants to compare the risks associated with two different stocks. Stock X and Stock Y. One way to measure the risk of a given stock is to measure the variation in the stock's daily price changes. The investor obtaims a random sample of 20 daily price changes from each stock, respectively. Figure 1 presents the Microsoft Excel output for the related statistical test at \( 5 \% \) significance level. \begin{tabular}{l|r|r} \hline F-Test Two-Sample for Variances \\ \hline & Price Change for Stock \( X \) & Price Change for Stock \( Y \) \\ \hline Mean & 0.327 & 0.1105 \\ Variance & 0.720306316 & 0.279983947 \\ Observations & 20 & 20 \\ df & 19 & 19 \\ F & 2.57267005 & \\ \hline P(Fcif) one-tail & 0.22911954 & \\ \hline \end{tabular} Figure 1: Microsoft Excel Output 1. Based on the Figure 1, can we conclude that there is difference in population variance of risk in two different stocks? (Use \( p \)-value approach) ii. Conduct a appropriate hypothesis testing to determine whether the population means of risk of a given stock from Stock \( \mathrm{X} \) significantly lower than Stock \( \mathrm{Y} \)

          REVISION QUESTIONS
1.
An investor wants to compare the risks associated with two different stocks. Stock X and Stock Y. One way to measure the risk of a given stock is to measure the variation in the stock's daily price changes. The investor obtaims a random sample of 20 daily price changes from each stock, respectively. Figure 1 presents the Microsoft Excel output for the related statistical test at \( 5 \% \) significance level.
\begin{tabular}{l|r|r}
\hline F-Test Two-Sample for Variances \\
\hline & Price Change for Stock \( X \) & Price Change for Stock \( Y \) \\
\hline Mean & 0.327 & 0.1105 \\
Variance & 0.720306316 & 0.279983947 \\
Observations & 20 & 20 \\
df & 19 & 19 \\
F & 2.57267005 & \\
\hline P(Fcif) one-tail & 0.22911954 & \\
\hline
\end{tabular}

Figure 1: Microsoft Excel Output
1. Based on the Figure 1, can we conclude that there is difference in population variance of risk in two different stocks? (Use \( p \)-value approach)
ii. Conduct a appropriate hypothesis testing to determine whether the population means of risk of a given stock from Stock \( \mathrm{X} \) significantly lower than Stock \( \mathrm{Y} \)

REVISION QUESTIONS
1.
An investor wants to compare the risks associated with two different stocks. Stock X and Stock Y. One way to measure the risk of a given stock is to measure the variation in the stock's daily price changes. The investor obtaims a random sample of 20 daily price changes from each stock, respectively. Figure 1 presents the Microsoft Excel output for the related statistical test at 5 % significance level.

F-Test Two-Sample for Variances

Price Change for Stock X Price Change for Stock Y

Mean 0.327 0.1105

Variance 0.720306316 0.279983947

Observations 20 20

df 19 19

F 2.57267005

P(Fcif) one-tail 0.22911954

Figure 1: Microsoft Excel Output
1. Based on the Figure 1, can we conclude that there is difference in population variance of risk in two different stocks? (Use p-value approach)
ii. Conduct a appropriate hypothesis testing to determine whether the population means of risk of a given stock from Stock X significantly lower than Stock Y

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