Hypothesis Testing – Is BofAML US High Yield variances greater than ICE BofAML Emerging Markets.
Using the seven steps (see below), Is “ICE BofAML US High Yield BB Total Return Index Value data (BAMLHYH0A1BBTRIV)” variances greater than “ICE BofAML Emerging Markets Corporate Plus Index Total Return Index Value (BAMLEMCBPITRIV)”.
Using the data, set up and conduct the experiments and report your results. Make sure to describe how you did each of the seven steps.
- State the hypothesis
- Identify the appropriate test statistic and its probability distribution
- Specify the significance level
- State the decision rule
- Collect the data and calculate the test statistic
- Make the statistical decision
- Make the economic or investment decision
Use Chapter 7 Quantitative investment analysis, DeFusco, et al, Chapter 7 – Hypothesis Testing to help answer the question