smb.formulas.8.3.04

# smb.formulas.8.3.04 - Formula Sheet for Statistical Methods...

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Formula Sheet for Statistical Methods in Business (8.3.04) Probability. The area under a distribution curve between points a and b represents the proportion of a population between points a and b. The area under the whole curve is 1. Table Use . Reduce the problem to distribution pictures that look like the pictures in the table. All distribution curves should be labeled with area information above the axis and scores below the axis. The p th percentile -a score related to a distribution below which lies p% of the area of the distribution. Normal Dist. If x is a score at the p th percentile on a N( μ , σ 2 ), then z=(x- μ )/ σ is at the p th percentile on a N(0,1). F dist. lower percentile rule : the p th percentile of an F n,d = the reciprocal of the (100-p) th percentile on an F d,n The p-value is the α -value for the hypothesis test under consideration with the property that a critical value will equal the value of the observed statistic. Steps for hypothesis testing : 1. Set up the null and alternative hypotheses, clearly defining any unknown parameters. H 0 always includes the “=” value and any other values for which you would take the same action as the “=” value. 2. Find a test statistics: (1) sensitive to the unknown parameter with (2) known distribution under the “=” value of the unknown parameter. Note we typically use a list of distribution facts to find a test statistic, substituting the “=” value of the unknown parameter under the null hypothesis to get the test statistic. Do NOT substitute for the estimate of the unknown parameter . State and label (a) the distribution fact and (b) the test statistic. 3.

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smb.formulas.8.3.04 - Formula Sheet for Statistical Methods...

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