A stockbroker at critical securities reported that the mean rate of return on a sample of 10 oil stocks was 12.6 percent with a standard deviation of 3.9 percent. The mean rate of return on a sample of 8 utility stocks was 10.9 with a standard deviation
of 3.5 percent . Calculate the sample variance for oil stocks and utility stocks.

## At .05 significance level can we conclude that there is more variation in the oil stocks?

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# 1 Answer

Sample variance: Stocks = 0.001521 Utility Stocks = 0.001225