Question

1. Create the printout for testing whether the mean low stock price of all NYSE stocks differs from $35 and attach it here. Answer the following questions regarding this printout:

Student Edition of Statistix 10.0                          4/21/2020, 5:29:39 AM One-Sample T Test Null Hypothesis: μ = 35 Alternative Hyp: μ ≠ 35                                                                                Lower    Upper Variable Mean       SE         T       DF             P      95% C.I. 95% C.I. Low      28.369   5.2626   -1.26     64         0.2123   17.856 38.883 Cases Included 65    Missing Cases 0

1. In the words of the problem, give a practical conclusion for this test. Make sure to include your choice of α in this conclusion.
2. In the words of the problem, state what a Type I error would be.
3. Use your knowledge of p-values and the printout above to state what the p-value would have been if you were conducting a one-tailed test instead of the two-tailed test I asked for.

Answer 1

We Have,

One-Sample T Test

Null Hypothesis: μ = 35

Alternative Hyp: μ ≠ 35

                                                                               Lower    Upper

Variable Mean       SE         T       DF             P      95% C.I. 95% C.I.

Low      28.369   5.2626   -1.26     64         0.2123   17.856 38.883

Cases Included 65    Missing Cases 0

Answer(a): From given output of one sample t-test, we can see that p-value is 0.2123 which suggest that we fail to reject the null hypothesis and we can conclude that mean low stock price of all NYSE stocks does not differs from $35 at 0.05 level of significance.

Answer(b): Type-I error is defined as rejecting a true null hypothesis. In this Problem if we conclude that the mean low stock price of all NYSE stocks differs from $35 then we will commit a type I error.

Answer(c): The p-value for a one-tailed test is just half of the p-value for a two-tailed test.

So for this problem the p-value would have been 0.10615 if we were conducting a one-tailed test.