well-known brokerage firm executive claimed that 40% of investors are currently confident of meeting their investment goals. An XYZ Investor Optimism Survey, conducted over a two week period, found that in a sample of 500 people, 35% of them said they are confident of meeting their goals. Test the claim that the proportion of people who are confident is smaller than 40% at the 0.005 significance level. The null and alternative hypothesis would be:   H0:μ≥0.4 H1:μ<0.4

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A well-known brokerage firm executive claimed that 40% of investors are currently confident of meeting their investment goals. An XYZ Investor Optimism Survey, conducted over a two week period, found that in a sample of 500 people, 35% of them said they are confident of meeting their goals.

Test the claim that the proportion of people who are confident is smaller than 40% at the 0.005 significance level.

The null and alternative hypothesis would be:

 

H0:μ≥0.4


H1:μ<0.4

 
H0:p≤0.4


H1:p>0.4

 
H0:p=0.4


H1:p≠0.4

 
H0:p≥0.4


H1:p<0.4

 
H0:μ=0.4


H1:μ≠0.4

 
H0:μ≤0.4


H1:μ>0.4

 


The test is:

 

two-tailed
left-tailed
right-tailed


The test statistic is: (to 3 decimals)

The p-value is: (to 4 decimals)

Based on this we:
  • Reject the null hypothesis
  • Fail to reject the null hypothesis
 
 
 
 
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