Formulating the hypotheses-validity of the brokerage

Reference no: EM1311602

Question 1: In 2001, the U.S. Department of Labor reported the average hourly earnings for U.S. production workers to be $14.32 per hour (The World Almanac 2003). A sample of 60 production workers during 2003 showed a sample mean of $14.68 per hour. Assuming the population standard deviation σ = $1.55, can we conclude that an increase occurred in the mean hourly earnings since 2001? Use α = .05.

a. State the hypotheses.

H₀: α =

H_a: α >

b. What is the p-value (to 4 decimals)?

Question 2: Speaking to a group of analysts in January 2006, a brokerage firm executive claimed that at least 70% of investors are currently confident of meeting their investment objectives. A UBS Investor Optimism Survey, conducted over the period January 2 to January 15, found that 67% of investors were confident of meeting their investment objectives (CNBC, January 20, 2006).

a. Formulate the hypotheses that can be used to test the validity of the brokerage firm executive's claim.

H₀: p ≥

H_a: p <

b. Assume the UBS Investor Optimism Survey collected information from 300 investors. What is the p-value for the hypothesis test (to 4 decimals)?

c. At α = .05, should the executive's claim be rejected?

Reference no: EM1311602

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