1 we have already derived the pq when we derived the

Info icon This preview shows pages 3–8. Sign up to view the full content.

View Full Document Right Arrow Icon
1. We have already derived the PQ when we derived the C.I. for μ 3
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
is our P.Q. 2. The test statistic is the PQ with the value of the parameter of interest under the null hypothesis () inserted: is our test statistic. That is, given in true 3. * Derive the decision threshold for your test based on the Type I error rate the significance level For the pair of hypotheses: versus It is intuitive that one should reject the null hypothesis, in support of the alternative hypothesis, when the sample mean is larger than . Equivalently, this means when the test statistic is larger than certain positive value - the question is what is the exact value of -- and that can be determined based on the significance level α—that is, how much Type I error we would allow ourselves to commit. Setting: P(Type I error) = P(reject = We will see immediately that from the pdf plot below. 4
Image of page 4
At the significance level α , we will reject in favor of if Other Hypotheses (one-sided test or one-tailed test) Test statistic : 5
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
(Two-sided or Two-tailed test) Test statistic : Reject if 6
Image of page 6
4.
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern