7th Edition

ISBN: 9781305254060

Author: Charles Henry Brase, Corrinne Pellillo Brase

Publisher: Cengage Learning

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Textbook Question

Chapter 10, Problem 4CR

For each hypothesis test in Problems 3-10, please provide the following information:

What is the level of significance? State the null and alternate hypotheses.

Check Requirements What sampling distribution will you use? What assumptions are you making? What is the value of the sample test statistic?

Find (or estimate) the P-value. Sketch the sampling distribution and show the area corresponding to the P-value.

Based on your answers in parts (i)—(iii), will you reject or fail to reject the null hypothesis? Are the data statistically significant at level α ?

Interpret your conclusion in the context of the application.

Note: For degrees of freedom d.f. not in the Student's t table, use the closest d.f that is smaller. In some cases, this choice will increase the P-value by a small amount or increase the length of a confidence interval, thereby making the answer slightly more “conservative." Answers may vary due to rounding.

Stocks: Retail and Utility How profitable are different sectors of the stock market? One way to answer such a question is to examine profit as a percentage of stockholder equity. A random sample of 32 retail stocks such as Toys Us, Best Buy, and Gap was studied for x₁, profit as a percentage of stockholder equity. The result was x ¯ 1 = 13.7 . A random sample of 34 utility (gas and electric) stocks such as Boston Edison, Wisconsin Energy, and Texas Utilities was studied for profit as a percentage of stockholder equity. The result was x ¯ 2 = 10.1 (Source: Fortune 500, Vol. 135, No. 8). Assume σ 1 = 4 .1 and σ 2 = 2 .7 .

Let µ 1 represent the population mean profit as a percentage of stockholder equity for retail stocks, and let µ 2 represent the population mean profit as a percentage of stockholder equity for utility stocks. Find a 95% confidence interval for µ 1 − µ 2 .

Examine the confidence interval and explain what it means in the context of this problem. Docs the interval consist of numbers that are all positive? All negative? Of different signs? At the 95% level of confidence, does

it appear that the profit as a percentage of stockholder equity for retail stocks is higher than that for utility stocks?

Test the claim that the profit as a percentage of stockholder equity for retail stocks is higher than that for utility stocks. Use α = 0.01.

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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Chapter 10, Problem 3CR

Chapter 10, Problem 5CR

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Chapter 10 Solutions

Understanding Basic Statistics

Ch. 10.1 - Statistical Literacy Are data that can be paired...Ch. 10.1 - Prob. 2P Ch. 10.1 - Statistical Literacy When testing the difference...Ch. 10.1 - statistical Literacy When conducting a paired...Ch. 10.1 - Statistical Literacy When using a Student's t...Ch. 10.1 - Critical Thinking Alisha is conducting a paired...Ch. 10.1 - Basic Computation: Paired Differences Test For a...Ch. 10.1 - Basic Computation: Paired Differences Test For a...Ch. 10.1 - For Problems 9-17 assume that the distribution of...Ch. 10.1 - For Problems 9-17 assume that the distribution of...

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Solution Summary: The author explains the 95% confidence interval for the difference of two means.

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