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    Hypothesis Test for pi = 0.40.

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    The following hypotheses are given.

    H0: pi = .40

    H1: pi =/ .40

    A sample of 120 observations revealed that p = .30. At the .05 significance level, can the null hypothesis be rejected?

    a. State the decision rule.

    b. Compute the value of the test statistic.

    c. What is your decision regarding the null hypothesis?

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    Solution Preview

    Since N = 120 (> 30), we use a z- test for population proportion.

    The test is two- tailed.

    (a) Critical z- score for a ...

    Solution Summary

    This solution provides the calculations for the hypothesis test.