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Comprehensive Explaination on Hypothesis Testing

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1. What are the null and alternate hypotheses for this test? Why?
2. What is the critical value for this hypothesis test using a 5% significance level?
3. Calculate the test statistic and the p-value using a 5% significance level.
4. State the decision for this test.
5. Determine the confidence interval level that would be associated with this hypothesis test at the 5% significance level. Explain why the confidence interval level is appropriate for this hypothesis test at the 5% significance level.
6. Create a confidence interval at the confidence level associated with the hypothesis test above.
7. Interpret this confidence interval.
8. Is there enough evidence to support that Method B is more effective? Explain this using the results from both the confidence interval and the hypothesis test.

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Solution Summary

The solution first gives detailed explanations on all terms relating to the hypothesis testing such as null and alternative hypothesis, test statistic, critical value and confidence interval. Then an exanple is shown to apply all of these terms. Next, another example of hypothesis testing is answered step by step.

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See Also This Related BrainMass Solution

CNP Bank Stat

Refer to data attachment
1. Century National Bank
Refer to data.
When Mr. Selig took over as president of Century several years ago, the use of debit cards was just beginning. He would like an update on the use of these cards. Develop a 95 percent confidence interval for the proportion of customers using these cards. On the basis of the confidence interval, is it reasonable to conclude that more than half of the customers use a debit card? Write a brief report interpreting the results.
See attachment Apendix.

2. Century National Bank
Refer to Data.
With many other options available, customers no longer let their money sit in a checking account. For many years the mean checking balance has been $1,600. Does the sample data indicate that the mean account balance has declined from this value?
Recent years have also seen an increase in the use of ATM machines. When Mr. Selig took over the bank, the mean number of transactions per month per customer was 8; now he believes it has increased to more than 10. In fact, the advertising agency that prepares TV commercials for Century would like to use this on the new commercial being designed. Is there sufficient evidence to conclude that the mean number of transactions per customer is more than 10 per month? Could the advertising agency say the mean is more than 9 per month?
The bank has branch offices in four different cities: Cincinnati, Ohio; Atlanta, Georgia; Louisville, Kentucky; and Erie, Pennsylvania. Mr. Selig would like to know whether there is a difference in the mean checking account balances among the four branches. If there are differences, between which branches do these differences occur?
Mr. Selig is also interested in the bank's ATMs. Is there a difference in ATM use among the branches? Also, do customers who have debit cards tend to use ATMs differently from those who do not have debit cards? Is there a difference in ATM use by those with checking accounts that pay interest versus those that do not? Prepare a report for Mr. Selig answering these questions.

3. The Century National Bank
Refer to the Century National Bank data. Using checking account balance as the dependent variable and using as independent variables the number of ATM transactions, the number of other services used, whether the individual has a debit card, and whether interest is paid on the particular account, write a report indicating which of the variables seem related to the account balance and how well they explain the variation in account balances. Should all of the independent variables proposed be used in the analysis or can some be dropped?

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