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Multiple Choice Questions on testing of hypothesis

1) Using the confidence interval when conducting a two-tail test for the population mean we do not reject the null hypothesis if the hypothesized value for
a. is to the left of the lower confidence limit
b. is to the right of the upper confidence limit
c. falls between the lower and upper confidence limits
d. falls in the rejection region

2) A mortgage broker is offering home mortgages at a rate of 9.5% but is fearful that this value is higher than many others are charging. A sample of 40 mortgages filed in the county court house shows an average of 9.25% with a standard deviation of 8.61%. Does this sample indicate a smaller average? Use alpha = 0.05 and assume a normally distributed population.

a.Yes, the test statistic falls in the rejection region
b. No, the test statistic falls in the acceptance region.
c. Yes, because the test statistic is greater than -1.645.
d. No, because the test statistic is -1.85 and falls in the rejection region.

Solution Preview

1) Using the confidence interval when conducting a two-tail test for the population mean we do not reject the null hypothesis if the hypothesized value for
a. is to the left of the lower confidence limit
b. is to the right of the upper confidence limit
c. falls between the lower and upper confidence limits
d. falls in the rejection region

Answer: c. falls between the lower and upper confidence limits

In a two tailed test, the acceptance region Null hypothesis is between the lower and upper confidence limits

2) A mortgage broker is offering home mortgages at a rate of 9.5% but is fearful that this value is higher than many others are charging. A sample of 40 mortgages ...

Solution Summary

Answers 2 Multiple Choice Questions on testing of hypothesis.

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