If employees are averaging $120 or less per month in tax-deferred investments. A sample of 80...

If employees are averaging $120 or less per month in tax-deferred investments. A sample of 80 employees will be used to test the hypothesis about the current level of investment activity among the population of employees. Assume the employee monthly investment has a std deviation of $75 and a 0.01 level of significance. what is the probability of the type II error? what is the probability if the monthly investment mean is $140?

Expert Solution

true mean ,    µ =    140

hypothesis mean,   µo =    120
significance level,   α =    0.01
sample size,   n =   80
std dev,   σ =    75.0000

δ=   µ - µo =    20

std error of mean,   σx = σ/√n =    75.0000   / √    80   =   8.38525

P(type II error) , ß =   P(Z < Zα - δ/σx)
= P(Z <    2.326   - (   20   /   8.3853   ))
=P(Z<   -0.059   ) =   0.4766   [excel fucntion: =normsdist(z)

orchestra answered 1 year ago

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