Question

Trevor is interested in purchasing the local hardware/sporting goods store in the small town of Dove Creek, Montana. After examining accounting records for the past several years, he found that the store has been grossing over $850 per day about 50% of the business days it is open. Estimate the probability that the store will gross over $850 for the following. (Round your answers to three decimal places.)

(a) at least 3 out of 5 business days


(b) at least 6 out of 10 business days


(c) fewer than 5 out of 10 business days


(d) fewer than 6 out of the next 20 business days


If the outcome described in part (d) actually occurred, might it shake your confidence in the statement p = 0.50? Might it make you suspect that p is less than 0.50? Explain.

Yes. This is unlikely to happen if the true value of p is 0.50.Yes. This is likely to happen if the true value of p is 0.50.    No. This is unlikely to happen if the true value of p is 0.50.No. This is likely to happen if the true value of p is 0.50.

(e) more than 17 out of the next 20 business days


If the outcome described in part (e) actually occurred, might you suspect that p is greater than 0.50? Explain.

Yes. This is unlikely to happen if the true value of p is 0.50.Yes. This is likely to happen if the true value of p is 0.50.    No. This is unlikely to happen if the true value of p is 0.50.No. This is likely to happen if the true value of p is 0.50.

Answer 1

In d and e the suspicion of foul play can be assigned a threshold value of 0.05 which is known as the significance level