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Problem Arule of thumb is that for working individuals one quarter of household income should be spent on housing. A financial advisor believes that the average proportion of income spent on housing is more than a quarter of their income. In a sample of 30 households, the mean proportion of household income spent on housing was 0.285 with a standard deviation of 0.063. Perform the relevant test of hypotheses at the 1% level of significance to prove the beliefs of a financial advisor.

Problem Arule of thumb is that for working individuals one quarter of household income should be spent on housing. A financial advisor believes that the average proportion of income spent on housing is more than a quarter of their income. In a sample of 30 households, the mean proportion of household income spent on housing was 0.285 with a standard deviation of 0.063. Perform the relevant test of hypotheses at the 1% level of significance to prove the beliefs of a financial advisor.

MATLAB: An Introduction with Applications
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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PERFORMANCE TASK 140 Problem: Anule of thumb is that for working individuals one quarter of household income should be spent on housing A financial advisor believes that the average proportion of income spent on housing is more than a quarter of their income. In a sample of 30 households, the mean proportion of household income spent on housing was 0.285 with a standard deviation of 0.063 Perform the relevant test of hypotheses at the 1% level of significance to prove the beliefs of a financial advisor Hypothesis Testing Step 1: Formulate hypotheses and identify the claim, if necessary = 25% H. p. > 25% Step 2: Identify the appropriate form of the test-statistic. z-lest for popukation proportion Step 3: Identifics the appropriate rejection for a given level of significance. Level of significance: a = 0.01 Types of hypothesis test: One - tailed test (Left) Critical Value:z= -2326 Rejection region: (-<NA-2.326) Decision Rule: Reject the null hypothesis if z> 2326. (0.25)(0.25) - 0.0791 30 p-P. 00791-0.25 Step 4: Calculate the test statistic value and make a statistical decision. --21617 (0.25)(0.75) 30 Deciston: Do not reject the null hypothesis since- 2 1617 is greater than -2.326 it does not fall under the rejection region. Step S: Draw conclusion. Honor pledge: "I affirm that/ have not given or received any unauthorized help on this assignment and that this work is my own."
Transcribed Image Text:PERFORMANCE TASK 140 Problem: Anule of thumb is that for working individuals one quarter of household income should be spent on housing A financial advisor believes that the average proportion of income spent on housing is more than a quarter of their income. In a sample of 30 households, the mean proportion of household income spent on housing was 0.285 with a standard deviation of 0.063 Perform the relevant test of hypotheses at the 1% level of significance to prove the beliefs of a financial advisor Hypothesis Testing Step 1: Formulate hypotheses and identify the claim, if necessary = 25% H. p. > 25% Step 2: Identify the appropriate form of the test-statistic. z-lest for popukation proportion Step 3: Identifics the appropriate rejection for a given level of significance. Level of significance: a = 0.01 Types of hypothesis test: One - tailed test (Left) Critical Value:z= -2326 Rejection region: (-<NA-2.326) Decision Rule: Reject the null hypothesis if z> 2326. (0.25)(0.25) - 0.0791 30 p-P. 00791-0.25 Step 4: Calculate the test statistic value and make a statistical decision. --21617 (0.25)(0.75) 30 Deciston: Do not reject the null hypothesis since- 2 1617 is greater than -2.326 it does not fall under the rejection region. Step S: Draw conclusion. Honor pledge: "I affirm that/ have not given or received any unauthorized help on this assignment and that this work is my own."
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