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Assignment 3 - Solved

The document analyzes average home prices and sizes from a sample. It finds that the average price of $163,862 is statistically higher than the hypothesized $150,000 maximum, allowing the claim to be accepted. However, the average living area of 1,807 square feet is not conclusively higher than the hypothesized 1,800 square foot maximum, so more testing is required before that claim can be accepted or rejected.

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284 views

Assignment 3 - Solved

The document analyzes average home prices and sizes from a sample. It finds that the average price of $163,862 is statistically higher than the hypothesized $150,000 maximum, allowing the claim to be accepted. However, the average living area of 1,807 square feet is not conclusively higher than the hypothesized 1,800 square foot maximum, so more testing is required before that claim can be accepted or rejected.

Uploaded by

lordavenger
Copyright
© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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SMMD Assignment 3

Ramashis Biswas | PGID: 61510121 | [email protected]

From the sample,

Average Price = $ 163862.1


Average Living Area = 1807.3 Sq Ft

For Average Price, H0 is $150000, then we can accept the claim if we can reject H0.
For Average Area, H0 is 1800, then we can accept the claim if we can reject H0.

For Price, p value is given by Prob > t .0001, i.e. the probability of finding a sample mean of
163862.1 under H0 is .0001. Since this is less than the given significance level, we have a
strong case of rejecting H0.
For Living Area, p value is .3563, which is greater than the significance level. Thus we
cannot reject H0 and further investigations is required.
Hence, we can accept the claim that the average house price is more than $ 150000. However,
the second claim still stands unproven and needs further testing.

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