Answered: A monthly income investment scheme at a…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

A monthly income investment scheme at a financial institution promises variable monthly returns to its investors. An investor will invest in it only if they are assured on average, no less than $1,260.00 monthly income. The investor has a sample of 25 months’ returns which has a mean of $1,330.00 and a standard deviation of $300. Since the investor requires a small tolerance for differences, a 1% significance level for evaluation was selected, should the investor invest in this scheme?

Requirements:

Consider the above scenario and conduct a hypothesis test using the 1% significance. In your answer, include the different steps used to construct a hypothesis test using the critical value method. See steps below.

Null and alternative hypotheses
Level of significance
Test statistics
Critical values and rejection region (draw the distribution)
Process of checking to see whether the test statistic falls in the rejection region and conclusion in words

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