# Testing Hypothesis and finding probabilities

Question 6

Given a volatility of 22.80% and an average of 17.70% what is the probability that a future return will fall below-100% Us the standard table to calculate the answer. Round only the final answers. Intermediate answers should not be rounded.

Question 7

An Ice-cream maker has developed a new flavour of chocolate ice cream (chocolate Sunset) to replace its traditional chocolate flavour. Because of additional manufacturing costs, the company does not want to make a replacement unless chocolate sunsets sale exceed the traditional flavour by an average of $1000 per day per store with a significance level of 1%. The company decides to conduct and hypothesis test by testing the marketing chocolate sunset n select stores and statistically measuring the results versus the performance of its traditional chocolate ice cream over the same period of time. Which of the following statement is not true?

A. The appropriate null and alternative hypotheses are H0:U chocolate sunset â?"Utraditional chocolate -< $1,000 per day and location and Ha:u chocolate sunset â?"u traditional chocolate > $1,000 per day

B. The hypothesis test is an example of a right tailed hypothesis test.

C. If the probability value (p-value) is 4% the company will reject the null hypothesis and accept the alternative hypothesis that the level of chocolate sunset will exceed traditional chocolate sales by an average of $1,000 per location.

D. This is an example of a hypothesis test on the difference in two population means.

Question 8

As the general manager of operations for a software company you are concerned about the responsiveness of your technical support desk. Industry studies have shown that the average response time ® needs to be under 3 minutes to avoid customer dissatisfaction. You decide to conduct and hypothesis test and state you null and alternative hypothesis as follow.

H0:r> 3 minutes

Ha:r< 3 minutes

What kind of hypothesis test are you conducting?

A. A left tail test

B. A right tail test

C. Two tail test

D. None of the above

Question 9

The placement office of a leading business school claims that more than 85% of its students obtain full time employment within three months of graduation. In conducting a hypothesis test of this assertion, how much would the school state its null alternative hypotheses?

A. H0:p<58% and Ha:p>85%

B. Ho:p<85% and Hap>85%

C. H0:p85% and Ha:p,85%

D. H0p.85% and ha:p<85%

Question 10

For an estimated regression line y=b0+b1x1+b2x2+b3x3 the coefficient for b1 would be the same weather x2 and x3 are included in the equation or not.

True

Or

False

#### Solution Preview

Question 6

Given a volatility of 22.80% and an average of 17.70% what is the probability that a future return will fall below-100% Us the standard table to calculate the answer. Round only the final answers. Intermediate answers should not be rounded.

Ans.

Volatility=sd. Let X=rate of future return. X has mean 17.7 and sd=22.8.

(If X=100)

Thus, P(X<100) = P[Z<(100-17.7)/22.8] = P(Z<3.61) = 0.999847 (rounded up to 1.0)

(If X=-100)

Thus, P(X<100) = P[Z<(-100-17.7)/22.8] = P(Z<-5.16) = 0

Question 7

An Ice-cream maker has developed a new flavour of chocolate ice cream (chocolate Sunset) to replace its traditional chocolate flavour. Because of additional manufacturing costs, the company does not want to make a replacement unless chocolate sunsets sale exceed the traditional flavour by an average of $1000 per day per store with a significance level of 1%. The company decides to conduct and hypothithesis ...

#### Solution Summary

Testing hypothesis on a set of data. Develop the steps in testing hypothesis with examples drawn from chocolate flavor and responsiveness of your technical support desk. Find some probability values