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Hypothesis testing for a proportion: Candidates A is running for office. It is claimed that the race is a dead heat, that is, that the true current proportion for the candidate is p = 0.50. A pollster polls a randomly selected group of n = 1000 people and finds that 535 prefer A (hence pˆ(n) = 0.535).
(a) At the 95% confidence level, using the null hypothesis H0 : p = 0.50 versus the alternative H1 : p ?= 0.50, would you reject the "dead heat" claim ? What is the P - value?
(b) Suppose that A believes he will be the winner, p > 0.5. At the 95% confidence level, using the null hypothesis H0 : p = 0.50 versus the alternative H1 : p > 0.50, would you reject the "dead heat" claim and conclude that A will win? What about at the 99% level?
(c) At the 95% confidence level, using the null hypothesis H0 : p = 0.50 versus the alternative H1 : p > 0.50, what is the probability of Type II error, if we use as the specific alternative hypothesis p = p1 = 0.52? What is the Power of the test?
Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..
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