Let x be a random variable representing dividend yield of bank stocks. We may assume that x has a normal distribution with σ = 3.3%. A random sample of 10 bank stocks gave the following yields (in percents). 5.7 4.8 6.0 4.9 4.0 3.4 6.5 7.1 5.3 6.1 The sample mean is x = 5.38%. Suppose that for the entire stock market, the mean dividend yield is μ = 4.0%. Do these data indicate that the dividend yield of all bank stocks is higher than 4.0%? Use ? = 0.01.

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Let x be a random variable representing dividend yield of bank stocks. We may assume that x has a normal distribution with σ = 3.3%. A random sample of 10 bank stocks gave the following yields (in percents).

5.7 4.8 6.0 4.9 4.0 3.4 6.5 7.1 5.3 6.1

The sample mean is x = 5.38%. Suppose that for the entire stock market, the mean dividend yield is μ = 4.0%. Do these data indicate that the dividend yield of all bank stocks is higher than 4.0%? Use ? = 0.01.

(a) What is the level of significance?


State the null and alternate hypotheses. Will you use a left-tailed, right-tailed, or two-tailed test?
H0: μ = 4%; H1: μ > 4%; right-tailed
H0: μ > 4%; H1: μ = 4%; right-tailed    
H0: μ = 4%; H1: μ < 4%; left-tailed
H0: μ = 4%; H1: μ ≠ 4%; two-tailed

(b) What sampling distribution will you use? Explain the rationale for your choice of sampling distribution.
The standard normal, since we assume that x has a normal distribution with unknown σ.The Student's t, since n is large with unknown σ.    The standard normal, since we assume that x has a normal distribution with known σ.The Student's t, since we assume that x has a normal distribution with known σ.

Compute the z value of the sample test statistic. (Round your answer to two decimal places.)


(c) Find (or estimate) the P-value. (Round your answer to four decimal places.)
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