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Inferences about Two Population Variances on Earnings

The standard deviation in the 12-month earnings per share for 10 companies in the airline industry was 4.27 and the standard deviation in the 12-month earnings per share for 7 companies in the automotive industry was 2.27 (Business Week, August 14, 2000). Conduct a test for the equal variances at a=.05. What is your conclusion about the variability in earnings per share for the airline industry and the automotive industry?

Solution Summary

The solution examines the standard deviation in the 12-month earnings per share for 10 companies in an airline industry.

$2.19