- CFA Exams
- CFA Level I Exam
- Study Session 3. Quantitative Methods (2)
- Reading 11. Hypothesis Testing
- Subject 12. Hypothesis Tests Concerning Differences between Variances

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**CFA Practice Question**

Which of the following statements are true with respect to a hypothesis test regarding the equality of the variances of two normally distributed populations?

II. The chi-squared is the appropriate test statistic to use in this case.

III. If the calculated statistic is within the critical values, the conclusion would be not to reject the statement that the variances of the two populations are equal.

IV. If the calculated statistic is within the critical values, the conclusion would be to reject the statement that the variances of the two populations are equal.

I. The F-statistic is the appropriate test statistic to use in this case.

II. The chi-squared is the appropriate test statistic to use in this case.

III. If the calculated statistic is within the critical values, the conclusion would be not to reject the statement that the variances of the two populations are equal.

IV. If the calculated statistic is within the critical values, the conclusion would be to reject the statement that the variances of the two populations are equal.

A. I and II

B. I and III

C. II and III

**Explanation:**When testing for the equality of the variances of two normally distributed populations, the F-statistic is the appropriate test statistic to use. Furthermore, if the calculated F-statistic is within the critical F-values (in other words, the sample results are within the acceptance range), then the conclusion would be not to reject (or accept) the null hypotheses stating that the variances of the two populations are equal.

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**User Contributed Comments**
1

User |
Comment |
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dimanyc |
NOte that if you know for sure that I is true, there are only 2 possible answers remaining. And II cannot be true as you can't usee both F and Chi-Sq test at the same time. |