The Chartered Financial Analyst CFA designation is fast beco

The Chartered Financial Analyst (CFA^®) designation is fast becoming a requirement for serious investment professionals. It is an attractive alternative to getting an MBA for students wanting a career in investment. A student of finance is curious to know if a CFA designation is a more lucrative option than an MBA. He collects data on 34 recent CFAs with a mean salary of $140,000 and a standard deviation of $35,000. A sample of 49 MBAs results in a mean salary of $124,000 with a standard deviation of $22,000. Use Table 2.

(₁ is the population mean for individuals with a CFA designation and ₂ is the population mean of individuals with MBAs.) Let CFAs and MBAs represent population 1 and population 2, respectively.

Set up the hypotheses to test if a CFA designation is more lucrative than an MBA at the 1% significance level. Do not assume that the population variances are equal.

Solution

a) H0: 1 2 0; HA: 1 2 < 0

b) test statistics value 0.00256

c) p value  0.498979>0.1

d)

No, since the p-value is more than .