The test statistic has value TS= . Testing at significance level α = 0.05, the rejection region is: (less/greater) than (2 dec places). Since the test statistic (is in/is not in) the rejection region, there (is evidence/is no evidence) to reject the null hypothesis, H 0. There (is sufficient/is insufficient) evidence to suggest that average rental income for houses like his in this area, i.e. 3 bedroom semi-detached town house, μ, is greater than 720 euro. Were any assumptions required in order for this inference to be valid? a: No - the Central Limit Theorem applies, which states the sampling distribution is normal for any population distribution. b: Yes - the population distribution must be normally distributed. Insert your choice (a or b): .
A homeowner is travelling overseas long-term and wants to rent out his house. A local management company advises the home-owner that average rental income for houses like his in this area, i.e. 3 bedroom semi-detached town house, is no more than 720 euro. The homeowner thinks that it is more than this. He notices a report in the local paper in which a random sample of 24 rental properties of this type, in this area, gave an average of 789.62 euro with a standard deviation of 84.33 euro. Is this evidence that the average rental income of houses of this type in this area is greater than 720 euro? To answer this, test the following hypotheses at significance level α = 0.05
H 0: μ = 720
H a: μ > 720.
An estimate of the population mean is .
The standard error is .
The distribution is (examples: normal / t12 / chisquare4 / F5,6).
The test statistic has value TS= .
Testing at significance level α = 0.05, the rejection region is:
(less/greater) than (2 dec places).
Since the test statistic (is in/is not in) the rejection region, there (is evidence/is no evidence) to reject the null hypothesis, H 0.
There (is sufficient/is insufficient) evidence to suggest that average rental income for houses like his in this area, i.e. 3 bedroom semi-detached town house, μ, is greater than 720 euro.
Were any assumptions required in order for this inference to be valid?
a: No - the Central Limit Theorem applies, which states the sampling
b: Yes - the population distribution must be normally distributed.
Insert your choice (a or b): .
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