lOMoARcPSD|5377635

Ch09 - quantitative finance

Law and Management (University of Mauritius)

StuDocu is not sponsored or endorsed by any college or university

Downloaded by Yogeeta Rughoo ([email protected])
 lOMoARcPSD|5377635

CHAPTER NINE

Statistical Inference:
Hypothesis Testing for Single Populations

227

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter Nine
B 1. Hypothesis testing is derived from the mathematical notion of
_______.

M A. direct proof
Term B. indirect proof
C. margin of error
D. infinity

C 2. The first step in testing a hypothesis is to establish _______.

E A. an not rejectance hypothesis and a rejection hypothesis

Term B. a power function
C. a null hypothesis and alternative hypothesis
D. an indirect hypothesis

228

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 229
B 3. In testing hypotheses, the researcher initially assumes that the
_______.

E A. alternative hypothesis is true.

Term B. null hypothesis is true
C. errors cannot be made
D. the population parameter of interest is known

A 4. Consider the following null and alternative hypotheses.

Ho :  £ 7
Ha :  > 6
These hypotheses _______________.

E A. are not mutually exclusive

App B. are not collectively exhaustive
C. do not reference a population parameter
D. are established correctly

D 5. Consider the following null and alternative hypotheses.

Ho :  £ 7
Ha :  > 7
These hypotheses _______________.

E A. are not mutually exclusive

App B. are not collectively exhaustive
C. do not reference a population parameter
D. are established correctly

B 6. Consider the following null and alternative hypotheses.

Ho :  ³ 7
Ha :  < 6
These hypotheses _______________.

E A. are not mutually exclusive

App B. are not collectively exhaustive
C. do not reference a population parameter
D. are established correctly

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

230 Test Bank

A 7. Consider the following null and alternative hypotheses.
Ho:  ³ 78
Ha:  < 81
These hypotheses _______________.

E A. are not mutually exclusive

App B. are not collectively exhaustive
C. do not reference a population parameter
D. are established correctly

C 8. Consider the following null and alternative hypotheses.

Ho: x £ 352
Ha: x > 352
These hypotheses _______________.

E A. are not mutually exclusive

App B. are not collectively exhaustive
C. do not reference a population parameter
D. are established correctly

C 9. Consider the following null and alternative hypotheses.

Ho : p £ 0.61
Ha : p
 > 0.61
These hypotheses _______________.

E A. are not mutually exclusive

App B. are not collectively exhaustive
C. do not reference a population parameter
D. are established correctly

C 10. Consider the following null and alternative hypotheses.

Ho: P £ 0.39
Ha: P > 0.39
These hypotheses _______________.

E A. are not mutually exclusive

App B. are not collectively exhaustive
C. do not reference a population parameter
D. are established correctly

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 231
C 11. Consider the following null and alternative hypotheses.
Ho: S ³ 558
Ha: S < 558
These hypotheses _______________.

E A. are not mutually exclusive

App B. are not collectively exhaustive
C. do not reference a population parameter
D. are established correctly

D 12. Consider the following null and alternative hypotheses.

Ho: s2 ³ 35
Ha: s2 < 35
These hypotheses _______________.

E A. are not mutually exclusive

App B. are not collectively exhaustive
C. do not reference a population parameter
D. are established correctly

D 13. The region of the distribution in hypothesis testing in which the

null hypothesis is rejected is called the _______.

E A. not rejectance region

Term B. null region
C. alternative region
D. rejection region

B 14. The rejection and not rejectance regions are divided by a point
called the _______.

E A. dividing point
Term B. critical value
C. rejection value
D. not rejectance value

B 15. The portion of the distribution which is not in the rejection

region is called the _______.

E A. tolerable region
Term B. not rejectance region
C. null region
D. alternative region

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

232 Test Bank

A 16. The probability of committing a Type I error is called _______.

E A. the level of significance

Term B. beta
C. the power of the test
D. reliability

A 17. The probability of committing a Type I error is called _______.

E A. 
Term B. 
C. 
D. 

A 18. In statistical hypothesis testing, another name for  is _______.

E A. level of significance
Term B. power
C. beta
D. Type II error probability

C 19. When a null hypothesis is rejected, the probability of committing

a Type II error is _______.

M A. 
Term B. 
C. 0
D. 1-

B 20. When a true null hypothesis is rejected, the researcher has

made a _______.

M A. Type II error
Term B. Type I error
C. sampling error
D. powerful error

C 21. When a false null hypothesis is rejected, the researcher has

made a _______.

M A. Type II error
Term B. Type I error
C. correct decision
D. powerful error

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 233
A 22. When a researcher fails to reject a false null hypothesis, a ______
error has been committed.

M A. Type II error
Term B. Type I error
C. sampling error
D. powerful error

C 23. When a researcher fails to reject a null hypothesis, the

probability of a Type I error is ________.

M A. 
Term B. 
C. 0
D. 1-

B 24. The probability of committing a Type II error is represented by

_______.

M A. 
Term B. 
C. 1- 
D. /2

C 25. Power is equal to _______.

M A. 1-if the null hypothesis is true

Term B. if the null hypothesis is false
C. 1- if the null hypothesis is false
D.  if the null hypothesis is true

A 26. Consider the following null and alternative hypotheses.

Ho:  £ 67
Ha:  > 67
These hypotheses _______________.

E A. indicate a one-tailed test with a rejection area in the right tail

App B. indicate a one-tailed test with a rejection area in the left tail
C. indicate a two-tailed test
D. are established incorrectly

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

234 Test Bank

B 27. Consider the following null and alternative hypotheses.
Ho:  ³ 67
Ha:  < 67
These hypotheses _______________.

E A. indicate a one-tailed test with a rejection area in the right tail

App B. indicate a one-tailed test with a rejection area in the left tail
C. indicate a two-tailed test
D. are established incorrectly

C 28. Consider the following null and alternative hypotheses.

Ho:  = 67
Ha:   67
These hypotheses _______________.

E A. indicate a one-tailed test with a rejection area in the right tail

App B. indicate a one-tailed test with a rejection area in the left tail
C. indicate a two-tailed test
D. are established incorrectly

A 29. Consider the following null and alternative hypotheses.

Ho: P £ 0.16
Ha: P > 0.16
These hypotheses _______________.

E A. indicate a one-tailed test with a rejection area in the right tail

App B. indicate a one-tailed test with a rejection area in the left tail
C. indicate a two-tailed test
D. are established incorrectly

B 30. Consider the following null and alternative hypotheses.

Ho: P ³ 0.16
Ha: P < 0.16
These hypotheses _______________.

E A. indicate a one-tailed test with a rejection area in the right tail

App B. indicate a one-tailed test with a rejection area in the left tail
C. indicate a two-tailed test
D. are established incorrectly

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 235
C 31. Consider the following null and alternative hypotheses.
Ho: P = 0.16
Ha: P  0.16
These hypotheses _______________.

E A. indicate a one-tailed test with a rejection area in the right tail

App B. indicate a one-tailed test with a rejection area in the left tail
C. indicate a two-tailed test
D. are established incorrectly

B 32. Whenever hypotheses are established such that the alternative

hypothesis is ">", then this would be a _______.

E A. two-tailed test
Term B. one-tailed test
C. Type II test
D. Type I test

A 33. Whenever hypotheses are established such that the alternative

hypothesis is "not equal to", then this would be a _______ test.

E A. two-tailed
Term B. one-tailed
C. Type II
D. Type I

A 34. If, in testing hypotheses, the researcher uses a method in which

the probability of the calculated statistic is compared to alpha to
reach a decision, the researcher is using the _______.

E A. probability method
Term B. critical value method
C. Z value method
D. statistical method

A 35. Suppose the alternative hypothesis in a hypothesis test is "the

population mean is greater than 65". If the sample size is 50 and
alpha =.05, the critical value of Z is _______.

M A. 1.645
Calc B. -1.645
C. 1.96
D. -1.96

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

236 Test Bank

B 36. Suppose the alternative hypothesis in a hypothesis test is "the
population mean is less than 60". If the sample size is 50 and
alpha =.05, the critical value of Z is _______.

M A. 1.645
Calc B. -1.645
C. 1.96
D. -1.96

C 37. Suppose the alternative hypothesis in a hypothesis test is "the

population mean is greater than 60". If the sample size is 80 and
alpha = .01, the critical value of Z is _______.

M A. 2.575
Calc B. -2.575
C. 2.33
D. -2.33
D 38. In a two-tailed hypothesis about a population mean with a
sample size of 100 and alpha = 0.10, the rejection region would
be _______.

E A. Z>1.64
Calc B. Z>1.28
C. Z<-1.28 and Z>1.28
D. Z<-1.64 and Z>1.64

C 39. In a two-tailed hypothesis about a population mean with a

sample size of 100 and alpha = 0.05, the rejection region would
be _______.

E A. Z>1.64
Calc B. Z>1.96
C. Z<-1.96 and Z>1.96
D. Z<-1.64 and Z>1.64

C 40. Suppose you are testing the null hypothesis that a population
mean is less than or equal to 80, against the alternative
hypothesis that the population mean is greater than 80. If the
sample size is 49 and alpha = .10, the critical value of Z is
_______.

M A. 1.645
Calc B. -1.645
C. 1.28
D. -1.28

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 237

A 41. Suppose you are testing the null hypothesis that a population
mean is less than or equal to 80, against the alternative
hypothesis that the population mean is greater than 80. If the
sample size is 49 and alpha =.05, the critical value of Z is
_______.

M A. 1.645
Calc B. -1.645
C. 1.96
D. -1.96

A 42. Suppose you are testing the null hypothesis that a population
mean is less than or equal to 80, against the alternative
hypothesis that the population mean is greater than 80. The
sample size is 49 and alpha =.05. If the sample mean is 84 and
the sample standard deviation is 14, the calculated Z value is
_______.

M A. 2
Calc B. -2
C. 14
D. -14

A 43. Suppose you are testing the null hypothesis that a population
mean is greater than or equal to 60, against the alternative
hypothesis that the population mean is less than 60. The
sample size is 64 and =.05. If the sample mean is 58 and the
sample standard deviation is 16, the calculated Z value is
_______.

M A. -1
Calc B. 1
C. -8
D. 8

C 44. Suppose a researcher is testing a null hypothesis that  = 61. A

random sample of n = 36 is taken resulting in a sample mean of
63 and S=9. The calculated Z value is _______.

M A. -0.22
Calc B. 0.22
C. 1.33
D. 8

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

238 Test Bank

B 45. A researcher is testing a hypothesis of a single mean. The
critical Z value for =.05 and a one-tailed test is 1.645. The
calculated Z value from sample data is 1.13. The decision made
by the researcher based on this information is to ______ the null
hypothesis.

M A. reject
App B. not reject
C. redefine
D. change the alternate hypothesis into

B 46. A researcher is testing a hypothesis of a single mean. The

critical Z value for =.05 and a two-tailed test is +1.96. The
calculated Z value from sample data is -1.85. The decision made
by the researcher based on this information is to _____ the null
hypothesis.

M A. reject
App B. not reject
C. redefine
D. change the alternate hypothesis into

A 47. A researcher is testing a hypothesis of a single mean. The

critical Z value for =.05 and a two-tailed test is +1.96. The
calculated Z value from sample data is 2.85. The decision made
by the researcher based on this information is to _____ the null
hypothesis.

M A. reject
App B. not reject
C. redefine
D. change the alternate hypothesis into

A 48. A researcher is testing a hypothesis of a single mean. The

critical Z value for =.05 and a two-tailed test is +1.96. The
calculated Z value from sample data is -2.11. The decision made
by the researcher based on this information is to _____ the null
hypothesis.

M A. reject
App B. not reject
C. redefine
D. change the alternate hypothesis into

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 239
A 49. A researcher is testing a hypothesis of a single mean. The
critical Z value for = .01 and a one-tailed test is -2.33. The
calculated Z value from sample data is -2.45. The decision made
by the researcher based on this information is to _________ the
null hypothesis.

M A. reject
App B. not reject
C. redefine
D. change the alternate hypothesis into

A 50. A researcher has a theory that the average age of managers in a

particular industry is over 35-years-old, and he wishes to prove
this. The null hypothesis to conduct a statistical test on this
theory would be ____________.

M A. the population mean is < 35

App B. the population mean is > 35
C. the population mean is = 35
D. the population mean is > 35

D 51. A company produces an item that is supposed to have a six inch

hole punched in the center. A quality control inspector is
concerned that the machine which punches the hole is
"out-of-control" (hole is too large or too small). In an effort to
test this, the inspector is going to gather a sample punched by
the machine and measure the diameter of the hole. The
alternative hypothesis used to statistical test to determine if the
machine is out-of-control is

M A. the mean diameter is > 6 inches

BApp B. the mean diameter is < 6 inches
C. the mean diameter is = 6 inches
D. the mean diameter is not equal to 6 inches

D 52. Jennifer Cantu, VP of Customer Services at Tri-State Auto

Insurance, Inc., monitors the claims processing time of the
claims division. Her standard includes "a mean processing time
of 5 days or less." Each week, her staff checks for compliance
by analyzing a random sample of 60 claims. Jennifer's null
hypothesis is ________.

E A.  > 5
BApp B. s > 5

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

240 Test Bank

C. n = 60
D.  £ 5

A 53. Jennifer Cantu, VP of Customer Services at Tri-State Auto

Insurance, Inc., monitors the claims processing time of the
claims division. Her standard includes "a mean processing time
of 5 days or less." Each week, her staff checks for compliance
by analyzing a random sample of 60 claims. Jennifer's
alternative hypothesis is ________.

E A.  > 5
BApp B. s £ 5
C. n = 60
D.  £ 5
C 54. Jennifer Cantu, VP of Customer Services at Tri-State Auto
Insurance, Inc., monitors the claims processing time of the
claims division. Each week, her staff randomly selects a sample
of 60 claims and tests the null hypothesis that the "mean
processing time is 5 days or less." Jennifer chooses a 0.05 level
of significance, the critical Z value is _____.

E A. 1.96
BCalc B. -1.96
C. 1.645
D. -1.645

B 55. Jennifer Cantu, VP of Customer Services at Tri-State Auto

Insurance, Inc., monitors the claims processing time of the
claims division. Each week, her staff randomly selects a sample
of 60 claims and tests the null hypothesis that the "mean
processing time is 5 days or less." Jennifer chooses a 0.01 level
of significance, the critical Z value is _____.

E A. -2.33
BCalc B. 2.33
C. -2.58
D. 2.58

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 241
C 56. Jennifer Cantu, VP of Customer Services at Tri-State Auto
Insurance, Inc., monitors the claims processing time of the
claims division. Each week, her staff randomly selects a sample
of 64 claims and tests the null hypothesis that the "mean
processing time is 5 days or less" using a 0.10 level of
significance. Last week the sample mean and standard
deviation were 5.2 days and 0.56 days, respectively. The
calculated Z value is _____.

M A. 0.36
BCalc B. 1.28
C. 2.86
D. 2.91

D 57. Jennifer Cantu, VP of Customer Services at Tri-State Auto

Insurance, Inc., monitors the claims processing time of the
claims division. Each week, her staff randomly selects a sample
of 64 claims and tests the null hypothesis that the "mean
processing time is 5 days or less" using a 0.05 level of
significance. Last week the sample mean and standard
deviation were 5.2 days and 0.56 days, respectively. The
appropriate decision is _____.

H A. reduce the sample size

BCalc B. increase the sample size
C. do not reject the null hypothesis
D. reject the null hypothesis

C 58. Jennifer Cantu, VP of Customer Services at Tri-State Auto

Insurance, Inc., monitors the claims processing time of the
claims division. Each week, her staff randomly selects a sample
of 64 claims and tests the null hypothesis that the "mean
processing time is 5 days or less" using a 0.05 level of
significance. Last week the sample mean and standard
deviation were 5.2 days and 1.56 days, respectively. The
appropriate decision is _____.

H A. reduce the sample size

BCalc B. increase the sample size
C. do not reject the null hypothesis
D. reject the null hypothesis

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

242 Test Bank

A 59. Restaurateur Denny Valentine is evaluating the feasibility of
opening a restaurant in Richmond. The Chamber of Commerce
estimates that "Richmond families, on the average, dine out at
least 3 evenings per week." Denny plans to test this hypothesis
using a random sample of 81 Richmond families. His null
hypothesis is __________.

E A. ³3
BApp B. s³3
C. n = 81
D. <3

C 60. Restaurateur Denny Valentine is evaluating the feasibility of

opening a restaurant in Richmond. The Chamber of Commerce
estimates that "Richmond families, on the average, dine out at
least 3 evenings per week." Denny plans to test this hypothesis
using a random sample of 81 Richmond families. His alternative
hypothesis is __________.

E A. ³3
BApp B. s<3
C. <3
D. n = 81

A 61. Restaurateur Denny Valentine is evaluating the feasibility of

opening a restaurant in Richmond. The Chamber of Commerce
estimates that "Richmond families, on the average, dine out at
least 3 evenings per week." Denny plans to test this hypothesis
at the 0.05 level of significance using a random sample of 81
Richmond families. The critical Z value is __________.

E A. -1.645
BCalc B. 1.645
C. -1.96
D. 1.96

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 243
C 62. Restaurateur Denny Valentine is evaluating the feasibility of
opening a restaurant in Richmond. The Chamber of Commerce
estimates that "Richmond families, on the average, dine out at
least 3 evenings per week." Denny plans to test this hypothesis
at the 0.01 level of significance using a random sample of 81
Richmond families. The critical Z value is __________.

E A. -2.58
BCalc B. 2.58
C. -2.33
D. 2.33

A 63. Restaurateur Denny Valentine is evaluating the feasibility of

opening a restaurant in Richmond. The Chamber of Commerce
estimates that "Richmond families, on the average, dine out at
least 3 evenings per week." Denny plans to test this hypothesis
at the 0.01 level of significance. His random sample of 81
Richmond families produced a mean and a standard deviation of
2.7 and 0.9 evenings per week, respectively. The calculated Z
value is __________.

M A. -3.00
BCalc B. 3.00
C. -0.33
D. 0.33

B 64. Restaurateur Denny Valentine is evaluating the feasibility of

opening a restaurant in Richmond. The Chamber of Commerce
estimates that "Richmond families, on the average, dine out at
least 3 evenings per week." Denny plans to test this hypothesis
at the 0.01 level of significance. His random sample of 81
Richmond families produced a mean and a standard deviation of
2.7 and 0.9 evenings per week, respectively. The appropriate
decision is __________.

H A. do not reject the null hypothesis

BCalc B. reject the null hypothesis
C. reduce the sample size
D. increase the sample size

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

244 Test Bank

B 65. Restaurateur Denny Valentine is evaluating the feasibility of
opening a restaurant in Richmond. The Chamber of Commerce
estimates that "Richmond families, on the average, dine out at
least 3 evenings per week." Denny plans to test this hypothesis
at the 0.01 level of significance. His random sample of 81
Richmond families produced a mean and a standard deviation of
2.7 and 1.8 evenings per week, respectively. The calculated Z
value is __________.

M A. 1.50
BCalc B. -1.50
C. 0.17
D. -0.17

A 66. Restaurateur Denny Valentine is evaluating the feasibility of

opening a restaurant in Richmond. The Chamber of Commerce
estimates that "Richmond families, on the average, dine out at
least 3 evenings per week." Denny plans to test this hypothesis
at the 0.01 level of significance. His random sample of 81
Richmond families produced a mean and a standard deviation of
2.7 and 1.8 evenings per week, respectively. The appropriate
decision is __________.

H A. do not reject the null hypothesis

BCalc B. reject the null hypothesis
C. reduce the sample size
D. increase the sample size

B 67. Restaurateur Denny Valentine is evaluating the feasibility of

opening a restaurant in Richmond. The Chamber of Commerce
estimates that "Richmond families, on the average, dine out at
least 3 evenings per week." Denny plans to test this hypothesis
at the 0.01 level of significance. His random sample of 81
Richmond families produced a mean and a standard deviation of
2.5 and 1.8 evenings per week, respectively. The appropriate
decision is __________.

H A. do not reject the null hypothesis

BCalc B. reject the null hypothesis
C. reduce the sample size
D. increase the sample size

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 245
B 68. When the rod shearing process at Stockton Steel is "in control" it
produces rods with a mean length of 120 inches. Periodically,
quality control inspectors select a random sample of 36 rods. If
the mean length of sampled rods is too long or too short, the
shearing process is shut down. The null hypothesis is _________.

E A. n = 36
BApp B.  = 120
C.   120
D. n  36

C 69. When the rod shearing process at Stockton Steel is "in control" it
produces rods with a mean length of 120 inches. Periodically,
quality control inspectors select a random sample of 36 rods. If
the mean length of sampled rods is too long or too short, the
shearing process is shut down. The alternative hypothesis is
_________.

E A. n = 36
BApp B.  = 120
C.   120
D. n  36

D 70. When the rod shearing process at Stockton Steel is "in control" it
produces rods with a mean length of 120 inches. Periodically,
quality control inspectors select a random sample of 36 rods. If
the mean length of sampled rods is too long or too short, the
shearing process is shut down. Sarah Shum, Director of Quality
Programs, chose a 0.05 level of significance for this test. The
critical Z values are _________.

E A. -1.645 and 1.645

BCalc B. -1.75 and 1.75
C. -2.33 and 2.33
D. -1.96 and 1.96

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

246 Test Bank

A 71. When the rod shearing process at Stockton Steel is "in control" it
produces rods with a mean length of 120 inches. Periodically,
quality control inspectors select a random sample of 36 rods. If
the mean length of sampled rods is too long or too short, the
shearing process is shut down. Sarah Shum, Director of Quality
Programs, chose a 0.10 level of significance for this test. The
critical Z values are _________.

E A. -1.645 and 1.645

BCalc B. -1.75 and 1.75
C. -2.33 and 2.33
D. -1.96 and 1.96

C 72. When the rod shearing process at Stockton Steel is "in control" it
produces rods with a mean length of 120 inches. Periodically,
quality control inspectors select a random sample of 36 rods. If
the mean length of sampled rods is too long or too short, the
shearing process is shut down. The last sample showed a mean
and standard deviation of 120.5 and 1.2 inches, respectively.
Using  = 0.05, the calculated Z value is _________.

M A. 0.42
BCalc B. -0.42
C. 2.50
D. -2.50

C 73. When the rod shearing process at Stockton Steel is "in control" it
produces rods with a mean length of 120 inches. Periodically,
quality control inspectors select a random sample of 36 rods. If
the mean length of sampled rods is too long or too short, the
shearing process is shut down. The last sample showed a mean
and standard deviation of 120.5 and 1.2 inches, respectively.
Using  = 0.05, the appropriate decision is _________.

H A. do not reject the null hypothesis and shut down the process
BCalc B. do not reject the null hypothesis and do not shut down the
process
C. reject the null hypothesis and shut down the process
D. reject the null hypothesis and do not shut down the process

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 247
B 74. When the rod shearing process at Stockton Steel is "in control" it
produces rods with a mean length of 120 inches. Periodically,
quality control inspectors select a random sample of 36 rods. If
the mean length of sampled rods is too long or too short, the
shearing process is shut down. The last sample showed a mean
and standard deviation of 120.2 and 1.2 inches, respectively.
Using  = 0.05, the appropriate decision is _________.

H A. do not reject the null hypothesis and shut down the process
BCalc B. do not reject the null hypothesis and do not shut down the
process
C. reject the null hypothesis and shut down the process
D. reject the null hypothesis and do not shut down the process

B 75. In performing a hypothesis test where the null hypothesis is that

the population mean is 23 against the alternative hypothesis
that the population mean is not equal to 23, a random sample of
17 items is selected. The sample mean is 24.6 and the sample
standard deviation is 3.3. It can be assumed that the population
is normally distributed. The degrees of freedom associated with
this are _______.

E A. 17
Calc B. 16
C. 15
D. 2

B 76. In performing a hypothesis test where the null hypothesis is that

the population mean is 4.8 against the alternative hypothesis
that the population mean is not equal to 4.8, a random sample
of 25 items is selected. The sample mean is 4.1 and the sample
standard deviation is 1.4. It can be assumed that the population
is normally distributed. The degrees of freedom associated with
this are _______.

E A. 25
Calc B. 24
C. 26
D. 2

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

248 Test Bank

B 77. In performing a hypothesis test where the null hypothesis is that
the population mean is 4.8 against the alternative hypothesis
that the population mean is not equal to 4.8, a random sample
of 25 items is selected. The sample mean is 4.1 and the sample
standard deviation is 1.4. It can be assumed that the population
is normally distributed. The level of significance is selected to
be 0.10. The table "t" value for this problem is _______.

E A. 1.318
Calc B. 1.711
C. 2.492
D. 2.797

C 78. In performing a hypothesis test where the null hypothesis is that

the population mean is 4.8 against the alternative hypothesis
that the population mean is not equal to 4.8, a random sample
of 25 items is selected. The sample mean is 4.1 and the sample
standard deviation is 1.4. It can be assumed that the population
is normally distributed. The computed "t" value for this problem
is _______.

E A. -12.5
Calc B. 12.5
C. -2.5
D. -0.7

C 79. In performing a hypothesis test where the null hypothesis is that

the population mean is 6.9 against the alternative hypothesis
that the population mean is not equal to 6.9, a random sample
of 16 items is selected. The sample mean is 7.1 and the sample
standard deviation is 2.4. It can be assumed that the population
is normally distributed. The computed "t" value for this problem
is _______.

M A. 0.05
Calc B. 0.20
C. 0.33
D. 1.33

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 249
D 80. In performing a hypothesis test where the null hypothesis is that
the population mean is 6.9 against the alternative hypothesis
that the population mean is not equal to 6.9, a random sample
of 16 items is selected. The sample mean is 7.1 and the sample
standard deviation is 2.4. It can be assumed that the population
is normally distributed. The level of significance is selected as
0.05. The table "t" value for this problem is _______.

E A. 1.753
Calc B. 2.947
C. 2.120
D. 2.131

A 81. In performing a hypothesis test where the null hypothesis is that

the population mean is 6.9 against the alternative hypothesis
that the population mean is not equal to 6.9, a random sample
of 16 items is selected. The sample mean is 7.1 and the sample
standard deviation is 2.4. It can be assumed that the population
is normally distributed. The level of significance is selected as
0.05. The decision rule for this problem is to reject the null
hypothesis if the computed "t" value is _______.

M A. less than -2.131 or greater than 2.131

Calc B. less than -1.761 or greater than 1.761
C. less than -1.753 or greater than 1.753
D. less than -2.120 or greater than 2.120

C 82. The diameter of 3.5 inch diskettes is normally distributed.

Periodically, quality control inspectors at Dallas Diskettes
randomly select a sample of 16 diskettes. If the mean diameter
of the diskettes is too large or too small the diskette punch is
shut down for adjustment; otherwise, the punching process
continues. The null hypothesis is _______.

E A. n  16
BApp B. n = 16
C.  = 3.5
D.   3.5

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

250 Test Bank

B 83. The diameter of 3.5 inch diskettes is normally distributed.
Periodically, quality control inspectors at Dallas Diskettes
randomly select a sample of 16 diskettes. If the mean diameter
of the diskettes is too large or too small the diskette punch is
shut down for adjustment; otherwise, the punching process
continues. The last sample showed a mean and standard
deviation of 3.49 and 0.08 inches, respectively. Using  = 0.05,
the critical "t" values are _______.

E A. -2.120 and 2.120

BCalc B. -2.131 and 2.131
C. -1.753 and 1.753
D. -1.746 and 1.746

D 84. The diameter of 3.5 inch diskettes is normally distributed.

Periodically, quality control inspectors at Dallas Diskettes
randomly select a sample of 16 diskettes. If the mean diameter
of the diskettes is too large or too small the diskette punch is
shut down for adjustment; otherwise, the punching process
continues. The last sample showed a mean and standard
deviation of 3.49 and 0.08 inches, respectively. Using  = 0.05,
the appropriate decision is _______.

H A. reject the null hypothesis and shut down the punch

BCalc B. reject the null hypothesis and do not shut down the punch
C. do not reject the null hypothesis and shut down the punch
D. do not reject the null hypothesis and do shut down the punch

A 85. The diameter of 3.5 inch diskettes is normally distributed.

Periodically, quality control inspectors at Dallas Diskettes
randomly select a sample of 16 diskettes. If the mean diameter
of the diskettes is too large or too small the diskette punch is
shut down for adjustment; otherwise, the punching process
continues. The last sample showed a mean and standard
deviation of 3.55 and 0.08 inches, respectively. Using  = 0.05,
the appropriate decision is _______.

H A. reject the null hypothesis and shut down the punch

BCalc B. reject the null hypothesis and do not shut down the punch
C. do not reject the null hypothesis and shut down the punch
D. do not reject the null hypothesis and do not shut down the
punch

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 251
C 86. In performing hypothesis test about the population mean, the
population standard deviation should be used if it is known. If it
is not known, for large samples it can be approximated by
_______.

E A. the sample mean

Term B. the sample size
C. the sample standard deviation
D. the population variance

A 87. In performing hypothesis test about the population mean, the

population standard deviation should be used if it is known. If it
is not known, it can be approximated by the sample standard
deviation if _______.

M A. the sample size is at least thirty

Term B. the sample is random
C. the population mean is known
D. the alpha is less than 0.10

A 88. A political scientist wants to prove that a candidate is currently

carrying more than 60% of the vote in the state. She has her
assistants randomly sample 200 eligible voters in the state by
telephone and only 90 declare that they support her candidate.
The calculated Z value for this problem is _______.

M A. -4.33
Calc B. 4.33
C. 0.45
D. -.31

B 89. A company believes that it controls more than 30% of the total
market share for one of its products. To prove this belief, a
random sample of 144 purchases of this product are contacted.
It is found that 50 of the 144 purchased this company's brand of
the product. If a researcher wants to conduct a statistical test for
this problem, the alternative hypothesis would be _______.

M A. the population proportion is less than 0.30

BApp B. the population proportion is greater than 0.30
C. the population proportion is not equal to 0.30
D. the population mean is less than 40

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

252 Test Bank

D 90. A company believes that it controls more than 30% of the total
market share for one of its products. To prove this belief, a
random sample of 144 purchases of this product are contacted.
It is found that 50 of the 144 purchased this company's brand of
the product. If a researcher wants to conduct a statistical test for
this problem, the calculated Z value would be _______.

M A. 0.05
BCalc B. 0.103
C. 0.35
D. 1.24

A 91. A company believes that it controls more than 30% of the total
market share for one of its products. To prove this belief, a
random sample of 144 purchases of this product are contacted.
It is found that 50 of the 144 purchased this company's brand of
the product. If a researcher wants to conduct a statistical test for
this problem, the test would be _______.

E A. a one-tailed test
BApp B. a two-tailed test
C. an alpha test
D. a finite population test

B 92. Ophelia O'Brien, VP of Consumer Credit of American First Banks

(AFB), monitors the default rate on personal loans at the AFB
member banks. One of her standard's is "no more than 5% of
personal loans should be in default." On each Friday, the default
rate is calculated for a sample of 500 personal loans. Last
Friday's sample contained 30 defaulted loans. Ophelia's null
hypothesis is _______.

E A. P > 0.05
BApp B. P £ 0.05
C. n = 30
D. n = 500

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 253
C 93. Ophelia O'Brien, VP of Consumer Credit of American First Banks
(AFB), monitors the default rate on personal loans at the AFB
member banks. One of her standard's is "no more than 5% of
personal loans should be in default." On each Friday, the default
rate is calculated for a sample of 500 personal loans. Last
Friday's sample contained 30 defaulted loans. Using  = 0.10,
the critical Z value is _______.

E A. 1.645
BCalc B. -1.645
C. 1.28
D. -1.28

A 94. Ophelia O'Brien, VP of Consumer Credit of American First Banks

(AFB), monitors the default rate on personal loans at the AFB
member banks. One of her standard's is "no more than 5% of
personal loans should be in default." On each Friday, the default
rate is calculated for a sample of 500 personal loans. Last
Friday's sample contained 30 defaulted loans. Using  = 0.10,
the calculated Z value is _______.

M A. 1.03
BCalc B. -1.03
C. 0.046
D. -0.046

D 95. Ophelia O'Brien, VP of Consumer Credit of American First Banks

(AFB), monitors the default rate on personal loans at the AFB
member banks. One of her standard's is "no more than 5% of
personal loans should be in default." On each Friday, the default
rate is calculated for a sample of 500 personal loans. Last
Friday's sample contained 30 defaulted loans. Using  = 0.10,
the appropriate decision is _______.

H A. reduce the sample size

BCalc B. increase the sample size
C. reject the null hypothesis
D. do not reject the null hypothesis

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

254 Test Bank

C 96. Ophelia O'Brien, VP of Consumer Credit of American First Banks
(AFB), monitors the default rate on personal loans at the AFB
member banks. One of her standard's is "no more than 5% of
personal loans should be in default." On each Friday, the default
rate is calculated for a sample of 500 personal loans. Last
Friday's sample contained 38 defaulted loans. Using  = 0.10,
the appropriate decision is _______.

H A. reduce the sample size

BCalc B. increase the sample size
C. reject the null hypothesis
D. do not reject the null hypothesis

C 97. The executives of CareFree Insurance, Inc. feel that "a majority
of our employees perceive a participatory management style at
CareFree." A random sample of 200 CareFree employees is
selected to test this hypothesis at the 0.05 level of significance.
Eighty employees rate the management as participatory. The
null hypothesis is __________.

E A. n = 30
BApp B. n = 200
C. P ³ 0.50
D. P < 0.50

A 98. The executives of CareFree Insurance, Inc. feel that "a majority
of our employees perceive a participatory management style at
CareFree." A random sample of 200 CareFree employees is
selected to test this hypothesis at the 0.05 level of significance.
Eighty employees rate the management as participatory. The
critical Z value is __________.

E A. -1.645
BCalc B. 1.645
C. -1.96
D. 1.96

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 255
B 99. The executives of CareFree Insurance, Inc. feel that "a majority
of our employees perceive a participatory management style at
CareFree." A random sample of 200 CareFree employees is
selected to test this hypothesis at the 0.05 level of significance.
Eighty employees rate the management as participatory. The
appropriate decision is __________.

H A. do not reject the null hypothesis

BCalc B. reject the null hypothesis
C. reduce the sample size
D. increase the sample size

A 100. The executives of CareFree Insurance, Inc. feel that "a majority
of our employees perceive a participatory management style at
CareFree." A random sample of 200 CareFree employees is
selected to test this hypothesis at the 0.05 level of significance.
Ninety employees rate the management as participatory. The
appropriate decision is __________.

H A. do not reject the null hypothesis

BCalc B. reject the null hypothesis
C. reduce the sample size
D. increase the sample size

D 101. Elwin Osbourne, CIO at GFS, Inc., suspects that at least 25% of
e-mail messages sent by GFS employees are not business
related. A random sample of 300 e-mail messages was selected
to test this hypothesis at the 0.01 level of significance. Fifty-four
of the messages were not business related. The null hypothesis
is ____.

E A.  = 30
BApp B. n = 300
C. P < 0.25
D. P ³ 0.25

A 102. Elwin Osbourne, CIO at GFS, Inc., suspects that at least 25% of
e-mail messages sent by GFS employees are not business
related. A random sample of 300 e-mail messages was selected
to test this hypothesis at the 0.01 level of significance. Fifty-four
of the messages were not business related. The critical Z value
is ____.

E A. 

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

256 Test Bank

BApp B. -1.96
C. 1.96
D. 2.57

C 103. Elwin Osbourne, CIO at GFS, Inc., suspects that at least 25% of
e-mail messages sent by GFS employees are not business
related. A random sample of 300 e-mail messages was selected
to test this hypothesis at the 0.01 level of significance. Fifty-four
of the messages were not business related. The appropriate
decision is _______.

E A. increase the sample size

BApp B. gather more data
C. reject the null hypothesis
D. do not reject the null hypothesis

C 104. Elwin Osbourne, CIO at GFS, Inc., suspects that at least 25% of
e-mail messages sent by GFS employees are not business
related. A random sample of 300 e-mail messages was selected
to test this hypothesis at the 0.01 level of significance. Sixty of
the messages were not business related. The appropriate
decision is _______.

E A. increase the sample size

BApp B. gather more data
C. reject the null hypothesis
D. do not reject the null hypothesis

A 105. A two tailed hypothesis test about the mean is performed. The
calculated Z value is 1.78. If alpha = 0.05, the correct decision
would be _______.

M A. do not reject the null hypothesis

Calc B. reject the null hypothesis
C. take a larger sample
D. get a new calculator

B 106. A two tailed hypothesis test about the mean is performed. The
calculated Z value is 1.78. If alpha = 0.10, the correct decision
would be _______.

M A. do not reject the null hypothesis

Calc B. reject the null hypothesis
C. take a larger sample
D. get a new calculator

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 257

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

258 Test Bank

C 107. A null hypothesis was rejected at the 0.10 level of significance.
It the level of significance were changed to 0.05 and the same
sample results were obtained, what decision should be made?

M A. reject the null hypothesis

App B. do not reject the null hypothesis
C. cannot be determined without further information
D. all of the above

B 108. A null hypothesis was not rejected at the 0.10 level of

significance. It the level of significance were changed to 0.05
and the same sample results were obtained, what decision
should be made?

M A. reject the null hypothesis

App B. do not reject the null hypothesis
C. cannot be determined without further information
D. all of the above

B 109. What happens to the rejection region if the level of significance

is changed from 0.10 to 0.05?

E A. it gets larger
App B. it gets smaller
C. it does not change
D. all of the above

A 110. What happens to the rejection region if the level of significance

is changed from 0.05 to 0.10?

E A. it gets larger
App B. it gets smaller
C. it does not change
D. all of the above

D 111. A null hypothesis is P > 0.65. To test this hypothesis, a sample

of 400 is taken and alpha is set at 0.05. If the true proportion is
P = 0.60, what is the probability of a type II error?

H A. 0.17
Calc B. 0.45
C. 0.95
D. 0.67

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 259
D 112. Discrete Components, Inc. manufactures a line of electrical
resistors. Presently, the carbon composition line is producing
100 ohm resistors. The population variance of these resistors
"must not exceed 4" to conform to industry standards.
Periodically, the quality control inspectors check for conformity
by randomly select 10 resistors from the line, and calculating
the sample variance. The last sample had a variance of 4.36.
Using  = 0.05, the null hypothesis is _________________.

E A.  = 100
BApp B. s £ 10
C. S2 ³ 4
D. s2 £ 4

B 113. Discrete Components, Inc. manufactures a line of electrical

resistors. Presently, the carbon composition line is producing
100 ohm resistors. The population variance of these resistors
"must not exceed 4" to conform to industry standards.
Periodically, the quality control inspectors check for conformity
by randomly select 10 resistors from the line, and calculating
the sample variance. The last sample had a variance of 4.36.
Using  = 0.05, the critical value of chi-square is
_________________.

E A. 18.31
BCalc B. 16.92
C. 3.94
D. 3.33

D 114. Discrete Components, Inc. manufactures a line of electrical

resistors. Presently, the carbon composition line is producing
100 ohm resistors. The population variance of these resistors
"must not exceed 4" to conform to industry standards.
Periodically, the quality control inspectors check for conformity
by randomly select 10 resistors from the line, and calculating
the sample variance. The last sample had a variance of 4.36.
Using  = 0.05, the calculated value of chi-square is
_________________.

E A. 1.74
BCalc B. 1.94
C. 10.90
D. 9.81

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

260 Test Bank

D 115. Discrete Components, Inc. manufactures a line of electrical
resistors. Presently, the carbon composition line is producing
100 ohm resistors. The population variance of these resistors
"must not exceed 4" to conform to industry standards.
Periodically, the quality control inspectors check for conformity
by randomly select 10 resistors from the line, and calculating
the sample variance. The last sample had a variance of 4.36.
Using  = 0.05, the appropriate decision is _________________.

H A. increase the sample size

BCalc B. reduce the sample size
C. reject the null hypothesis
D. do not reject the null hypothesis

B 116. David Desreumaux, VP of Human Resources of American First

Banks (AFB), is reviewing the employee training programs of
AFB banks. Based on a recent census of personnel, David knows
that the variance of teller training time in the Southeast region
is 8, and he wonders if the variance in the Southwest region is
the same number. His staff randomly selected personnel files
for 15 tellers in the Southwest Region, and determined that their mean
training time was 25 hours and that the standard deviation was 4 hours. Using 
= 0.10, the null hypothesis is ________.

E A.  = 25
BApp B. s2 = 8
C. s2 = 4
D. s2 £ 8

B 117. David Desreumaux, VP of Human Resources of American First

Banks (AFB), is reviewing the employee training programs of
AFB banks. Based on a recent census of personnel, David knows
that the variance of teller training time in the Southeast region
is 8, and he wonders if the variance in the Southwest region is
the same number. His staff randomly selected personnel files
for 15 tellers in the Southwest Region, and determined that their mean
training time was 25 hours and that the standard deviation was 4 hours. Using 
= 0.10, the critical values of chi-square are ________.

M A. 7.96 and 26.30

BCalc B. 6.57 and 23.68
C. -1.96 and 1.96
D. -1.645 and 1.645

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 261
A 118. David Desreumaux, VP of Human Resources of American First
Banks (AFB), is reviewing the employee training programs of
AFB banks. Based on a recent census of personnel, David knows
that the variance of teller training time in the Southeast region
is 8, and he wonders if the variance in the Southwest region is
the same number. His staff randomly selected personnel files
for 15 tellers in the Southwest Region, and determined that their mean
training time was 25 hours and that the standard deviation was 4 hours. Using 
= 0.10, the calculated value of chi-square is ________.

E A. 28.00
BCalc B. 30.00
C. 56.00
D. 60.00

D 119. David Desreumaux, VP of Human Resources of American First

Banks (AFB), is reviewing the employee training programs of
AFB banks. Based on a recent census of personnel, David knows
that the variance of teller training time in the Southeast region
is 8, and he wonders if the variance in the Southwest region is
the same number. His staff randomly selected personnel files
for 15 tellers in the Southwest Region, and determined that their mean
training time was 25 hours and that the standard deviation was 4 hours. Using 
= 0.10, the appropriate decision is ________.

H A. increase the sample size

BCalc B. reduce the sample size
C. do not reject the null hypothesis
D. reject the null hypothesis

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

262 Test Bank

120. The last operation on the 'dry line' at Canine Delights is a
semiautomatic bag filling step. The dry line mixes, shapes,
dries, and bags the five dry dog foods (one at a time) in Canine
Delights' product line. Each of the five mixes is offered in 4
different sizes (5, 10, 15, and 25 pounds). When the bag filling
machine is properly adjusted, the mean weight of the filled bags
equals the advertised weight. Even so, the weight varies from
bag to bag.

Discuss statistical procedures for controlling the bag filling

operation. Other than improper adjustment of the machine,
what factors may account for the variability of the bags weights,
or for an upward (downward) drift in the mean bag weight?
What are the consequences of significantly overfilling
(underfilling) the bags?
M _________________________________________________________________
BApp _________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 263
121. Carlos Cavazos, Director of Human Resources, is developing
plans for an employee morale 'barometer.' First, he plans to
measure the current morale level to use as a benchmark. Then,
periodic (possibly monthly) measurements will be taken to track
increases (decreases). His primary measuring instrument will be
several 5-point scaled items (1 = totally depressed, 5 = it
doesn't get any better than this). Carlos believes that, after the
bugs are worked out, the system will allow management to
assess the impact of managerial actions on employee morale.

Describe the statistical methods which will be useful to Carlos,

during the design and implementation of the morale barometer.
What are the limitations of this system? What factors affect
employee morale?
M _________________________________________________________________
BApp _________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

264 Test Bank

122. Alan Lessoff, VP of Marketing at CyberWarehouse, Inc. (CWI),
wants to know what makes a good web site for online shoppers.
What design factors of a web site increase repeat visits by web
shoppers? Color schemes? Graphics? Animations? Audio?
Organization of pages? Ease of navigation? Opinion polls? E-
mail feedback?

Representatives of Web Shoppe Designs (WSD) claim that their

team knows, and offer Alan a test trial of their design. Alan is
inclined to accept the offer since it would be hosted, at no
expense to CWI, on WSD's servers during the trial period.

Alan has accumulated an extensive database of demographic

data, and frequency of visits of repeat visitors to CWI web sites.
The WSD representatives will collect comparable data during the
trial period.

Describe the statistical methods which will be useful to Alan at

the conclusion of the trial period.
M
BApp

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

Chapter 9: Statistical Inference: Hypothesis Testing for Single

Populations 265
123. Online financial brokerages continue go grow with the Internet.
CyberMarkets, Inc. (CMI) advises e-commerce businesses on
their marketing strategies.

Addalie McMinn, VP of Research at CMI, expects increasingly

intense competition between online brokerages for new
customers as the industry matures. She wants to learn more
about the customers of online brokerages; she wants to
understand "what makes them tick," so she can advise CMI
clients how to compete more successfully. What factors do
these investors use to choose one broker over another?
Transaction costs? Basic service characteristics such as fast
order execution, and timely, well-organized statements? Free
tie-in services such as an address book, a calendar service, and
links to favorite web sites for gifts.

Should Addalie segment the customer population? Are all

factors equally important for all market segments? Does age
matter? Does gender matter? Does profession matter?

Addalie has accumulated an extensive database of on traditional

full-service brokerage customers. She plans to use summary
measures from the database as benchmarks for comparisons
with online customers.

Describe the statistical methods that will be useful to Addalie

during the study.
M
BApp

Downloaded by Yogeeta Rughoo ([email protected])

 lOMoARcPSD|5377635

266 Test Bank

Downloaded by Yogeeta Rughoo ([email protected])