211-01-02+Class+4+Ex-1

# 211-01-02+Class+4+Ex-1 - Read Class Notes 1-2, first three...

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Read Class Notes 1-2, first three pages. Study Class 3 example exercise. HW3 Bus Issue: Financial service professionals monthly sales BusQues: Is the mean sales/month less than \$80,000? (Do we have evidence to conclude the population mean is less than 80?) Data: Sample of 100. Assume population (all fin serv professionals) stdev = 12(\$1000). Two cases: (a.) x-bar = 78.5. (b.) x-bar = 77. Analysis: Hypothesis Testing -- Normal Test for Mean 1. Hypotheses: Could draw the Normal sampling distribution of x-bar: 2. Test Statistic: x-bar f(x-bar) 75.0 0.000 3. Sign Level: 75.5 0.000 4. Reject Rule: Reject Ho if x-bar < 77.21 =NORMINV(.01,80,12/10) 76.0 0.001 12a 12b 76.5 0.005 5. Calculations: x-bar = 78.5 77 77.0 0.015 p-value = 0.106 0.006 =NORMDIST(77,80,12/10,TRUE) 77.5 0.038 78.0 0.083 6. Conclusion: Do not reject Ho. Reject Ho. 78.5 0.152 79.0 0.235 Bus Answer: This sample (mean=\$78,500) This sample (mean=\$77,000) is strong 79.5 0.305 is insufficient evidence to con- enough evidence to conclude that the 80.0 0.332 clude that the mean monthly mean monthly sales is less than \$80,000. 80.5 0.305 sales is < \$80,000. (If the mean were exactly = 80, 81.0 0.235 (If the mean exactly = 80, the likelihood for a sample 81.5 0.152 the likelihood for a sample of 100 of obtaining this 82.0 0.083 of 100 of obtaining this sample mean or smaller 82.5 0.038 sample mean or smaller is less han 1%. ) 83.0 0.015 is more than 10%. In this 83.5 0.005 test, we used a "cutoff" of 1%) 84.0 0.001 of 1%.) 84.5 0.000 85.0 0.000

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## This note was uploaded on 07/17/2011 for the course STATS 211 taught by Professor Dunne during the Spring '07 term at University of Dayton.

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211-01-02+Class+4+Ex-1 - Read Class Notes 1-2, first three...

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