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Wall Street securities firms paid out record year -end bonuses of $125,500 per employee for 2005. Suppose we would like to take a sample of employees at the Jones & Ryan securities firm to see whether the mean year-end bonus is different from the reported mean of $125,500 for the population.
a.) State the null and alternative hypotheses you would use to test whether the year-end bonuses paid by Jones & Ryan were different from the population mean.
b.) Suppose a sample of 40 Jones & Ryan employees showed a sample mean year-end bonus of $118,000. Assume a population standard deviation of o=$30,000 and compute the p-value.
c.) With a=.05 as the level of significance, what is your conclusion?
d.) Repeat the preceding hypothesis test using the critical value approach.
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