A real estate agent claims that a house's appraisal value is higher than its selling price on average in a Melbourne suburb. She collected the selling price and the appraisal value for 25 recently sold houses in this suburb. The mean and standard deviation of the selling price, the appraisal value, and the differences between the two (Differences = Selling-Appraisal) are presented in Table 1. Table 1: House price (in thousands) Selling 861 Appraisal Difference -14 23 Mean 875 Standard Deviation 104 78 1. Identify the sampling design used to obtain the data in Table 1. 2. The standard deviation of the differences (between selling price and appraisal value) is much smaller than the standard deviation of selling price or appraisal value, Briefly explain why. 3. Assume the differences are normally distributed. Use the p-value approach in hypothesis testing to evaluate the real estate agent's claim at the 5% significance level. Write down the five steps of hypothesis testing (use appropriate Excel functions to conduct you analysis but do not copy/paste a screenshot of your Excel output). Present your test statistic and p-value rounded to three decimal places.

A real estate agent claims that a house's appraisal value is higher than its selling price on average in a Melbourne suburb. She collected the selling price and the appraisal value for 25 recently sold houses in this suburb. The mean and standard deviation of the selling price, the appraisal value, and the differences between the two (Differences = Selling-Appraisal) are presented in Table 1. Table 1: House price (in thousands) Selling 861 Appraisal Difference -14 23 Mean 875 Standard Deviation 104 78 1. Identify the sampling design used to obtain the data in Table 1. 2. The standard deviation of the differences (between selling price and appraisal value) is much smaller than the standard deviation of selling price or appraisal value, Briefly explain why. 3. Assume the differences are normally distributed. Use the p-value approach in hypothesis testing to evaluate the real estate agent's claim at the 5% significance level. Write down the five steps of hypothesis testing (use appropriate Excel functions to conduct you analysis but do not copy/paste a screenshot of your Excel output). Present your test statistic and p-value rounded to three decimal places.

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Description: A real estate agent claims that a house's appraisal value is higher than its selling price on averagein a Melbourne suburb. She collected the selling price and the appraisal value for 25 recently soldhouses in this suburb. The mean and standard devi

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A real estate agent claims that a house's appraisal value is higher than its selling price on average
in a Melbourne suburb. She collected the selling price and the appraisal value for 25 recently sold
houses in this suburb. The mean and standard deviation of the selling price, the appraisal value,
and the differences between the two (Differences = Selling-Appraisal) are presented in Table 1.
Table 1: House price (in thousands)
Selling
861
Appraisal
Difference
-14
23
Mean
875
Standard Deviation
104
78
1. Identify the sampling design used to obtain the data in Table 1.
2. The standard deviation of the differences (between selling price and appraisal value) is much
smaller than the standard deviation of selling price or appraisal value, Briefly explain why.
3. Assume the differences are normally distributed. Use the p-value approach in hypothesis
testing to evaluate the real estate agent's claim at the 5% significance level. Write down the
five steps of hypothesis testing (use appropriate Excel functions to conduct you analysis but
do not copy/paste a screenshot of your Excel output). Present your test statistic and p-value
rounded to three decimal places.

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