Suppose you are the owner of a chain of pizza restaurants. You believe that the

Question

Suppose you are the owner of a chain of pizza restaurants. You believe that the manager at the Champaign branch has a very irregular performance. You gather monthly data on profits for the Champaign branch of your restaurant (measured in dollars and cents). Given this information, which of the following tests would be most appropriate to use to test whether the volatility in profits for the Champaign branch is more than $20,000? O A z-test for the difference in means O An independent samples t-test for difference in means (equal variances) O A z-test for population proportion O A z-test for the mean O A chi-squared test for variance OAn F-test for difference in variances O An F-test for difference in means O A paired sample t-test for difference in means A t-test for the mean O An independent samples t-test for difference in means (unequal variances) O A z-test for difference in proportions

Explanation / Answer

Since we are calculating volatility, we are checking for the variance of the profits. Again, we are checking the volatility of profits for a single branch, hence we are taking monthly profits for 1 branch i.e 1 sample.

So, we eliminate, all the tests for means and proportions (as we are testing for variance), and all tests for 2 samples(i.e difference in means or proportions or variances for 2 samples).

We are then left with 1 option, which is the chi square test for variance, whic is the correct option.

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