Essay
Profit Margin An investor is considering two types of investment. She is quite satisfied that the expected profit margin on Investment 1 is higher than the expected profit margin on Investment 2. However, she is quite concerned that the risk associated with Investment 1 is higher than that of Investment 2. To help make her decision, she randomly selects seven monthly profit margins on investment 1 and ten monthly profit margins on investment 2. She finds that the sample variances of Investments 1 and 2 are 225 and 118, respectively. {Profit Margin Narrative} Estimate with 95% confidence the ratio of the two population variances.
Correct Answer:
Verified
Correct Answer:
Verified
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