Question

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 42 recent CFAs with a mean salary of $135,000 and a standard deviation of $43,000. A sample of 55 MBAs results in a mean salary of $133,000 with a standard deviation of $21,000.

Assume that μ₁ is the population mean for individuals with a CFA designation and μ₂ is the population mean of individuals with MBAs. (You may find it useful to reference the appropriate table: z table or t table)

b-1. Calculate the value of the test statistic. Do not assume that the population variances are equal. (Round all intermediate calculations to at least 4 decimal places and final answer to 2 decimal places.)

Answer 1

b - 1) Test statistic

t = 0.28