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 40 recent CFAs with a mean salary of $143,000 and a standard deviation of $45,000. A sample of 59 MBAs results in a mean salary of $126,000 with a standard deviation of $22,000. Required:
a. Use the p-value approach to test if a CFA designation is more lucrative than an MBA at the 5% significance level. Do not assume that the population variances are equal. Make sure to state the competing hypotheses.
b. Repeat the analysis with the critical value approach.