Question

A statistical analyst for the Wall Street Journal randomly selected six companies and recorded both the price per share of stock on January 1, 2009 and on April 30, 2009. The results are presented below. Suppose the analyst wished to see if the average price per share of stock on April 30, 2009 is less than the average price per share of stock on January 1, 2009 at α=.025. Apr. 30, 2009 33 27 32 25 35 34 Jan. 1, 2009 40 28 30 34 48 36 For the hypothesis stated above, what is the decision (in terms of "April 30, 2009" minus "January 1, 2009")?

a. Reject H0 because P-value < α

b. Reject H0 because the test statistic is to the right of the negative critical value

c. None of the answers is correct

d. Fail to reject H0 because the test statistic is to the right of the negative critical value

e. Fail to reject H0 because P-value < α

Answer 1

Answer:-

Given That:-

A statistical analyst for the Wall Street Journal randomly selected six companies and recorded both the price per share of stock on January 1, 2009 and on April 30, 2009. The results are presented below. Suppose the analyst wished to see if the average price per share of stock on April 30, 2009 is less than the average price per share of stock on January 1, 2009 at α=.025. Apr. 30, 2009 33 27 32 25 35 34 Jan. 1, 2009 40 28 30 34 48 36

For the hypothesis stated above, what is the decision (in terms of "April 30, 2009" minus "January 1, 2009")?

= - 1.472

P - value = T.Dist (-1.472, 10,1) Using Excel file

= 0.086

Critical value = T.INV (0.025, 10) = -2.228

So,

Answer d

d. Fail to reject H0 because the test statistic is to the right of the negative critical value

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