Chapter 7: Q19E (page 403)
Consider the test of . For each of the following, find the p-value of the test:
a.
b.
c.
Short Answer
- The p-value is 0.115.
- The p-value is 0.884.
- The p-value is 0.230.
Chapter 7: Q19E (page 403)
Consider the test of . For each of the following, find the p-value of the test:
a.
b.
c.
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Get started for freeWhich hypothesis, the null or the alternative, is the status-quo hypothesis? Which is the research hypothesis?
Authorizing computer users with palm prints. Access to computers, email, and Facebook accounts is achieved via a password—a collection of symbols (usually letters and numbers) selected by the user. One problem with passwords is that persistent hackers can create programs that enter millions of combinations of symbols into a target system until the correct password is found. An article in IEEE Pervasive Computing (October-December 2007) investigated the effectiveness of using palm prints to identify authorized users. For example, a system developed by Palmguard, Inc. tests the hypothesis
\({H_0}\): The proposed user is authorized
\({H_a}\): The proposed user is unauthorized
by checking characteristics of the proposed user’s palm print against those stored in the authorized users’ data bank.
a. Define a Type I error and Type II error for this test. Which is the more serious error? Why?
A random sample of 80 observations from a population with a population mean 198 and a population standard deviation of 15 yielded a sample mean of 190.
a. Construct a hypothesis test with the alternative hypothesis that\(\mu < 198\)at a 1% significance level. Interpret your results.
b. Construct a hypothesis test with the alternative hypothesis that
at a 1% significance level. Interpret your results.
c. State the Type I error you might make in parts a and b.
7.87 Trading skills of institutional investors. Refer to The Journal of Finance (April 2011) analysis of trading skills of institutional investors, Exercise 7.36 (p. 410). Recall that the study focused on “round-trip” trades, i.e., trades in which the same stock was both bought and sold in the same quarter. In a random sample of 200 round-trip trades made by institutional investors, the sample standard deviation of the rates of return was 8.82%. One property of a consistent performance of institutional investors is a small variance in the rates of return of round-trip trades, say, a standard deviation of less than 10%.
a. Specify the null and alternative hypotheses for determining whether the population of institutional investors performs consistently.
b. Find the rejection region for the test using
c. Interpret the value ofin the words of the problem.
d. A Mini tab printout of the analysis is shown (next column). Locate the test statistic andon the printout.
e. Give the appropriate conclusion in the words of the problem.
f. What assumptions about the data are required for the inference to be valid?
If the rejection of the null hypothesis of a particular test would cause your firm to go out of business, would you want to be small or large? Explain
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