Question

As part of his business studies, an analyst learns that the amount invested by recent college alumni is normally distributed.
He the collects a sample of 25 recent alumni and finds that the average amount invested is $5200 and and the sample standard deviation among these recent alumni is $400.
a) Construct a 99% CI for the true (pop) mean amount invested by recent alumni.
b) Had a business partner told the analyst, prior to his study, that the true (pop) mean amount invested is $5000, yet the analyst thought it was greater, state the appropriate hypotheses and conduct the appropriate test at alpha of 0.05 using the sample evidence he obtained.
Use the Classical Method here.
c) Had the business partner instead told the analyst, prior to his study, that the true (pop) mean amount invested is $5000, yet the analyst thought it was different, state the appropriate hypotheses and conduct the appropriate test at alpha of 0.05 using the sample evidence he obtained. Use the Classical Method here.
EC: Do part b and c in this problem using the p Value Method.

Answer 1

Given:

Sample size, n = 25

Sample mean, = 5200

Sample standard deviation, s = 400

Significance level, = 0.05

b) Hypothesis test:

The null and alternative hypothesis is

Conclusion: Reject H0. At 0.05 significance level, there is sufficient evidence to conclude that population mean is a different 5000.