Probability and Statistics for Engineering and the Sciences
9th Edition
ISBN: 9781305251809
Author: Jay L. Devore
Publisher: Cengage Learning
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Textbook Question
Chapter 8.3, Problem 39E
Reconsider the accompanying sample data on expense ratio (%) for large-cap growth mutual funds first introduced in Exercise 1.53.
A normal probability plot shows a reasonably linear pattern.
- a. Is there compelling evidence for concluding that the population mean expense ratio exceeds 1%? Carry out a test of the relevant hypotheses using a significance level of .01.
- b. Referring back to (a), describe in context type I and II errors and say which error you might have made in reaching your conclusion. The source from which the data was obtained reported that μ = 1.33 for the population of all 762 such funds. So did you actually commit an error in reaching your conclusion?
- c. Supposing that σ = .5, determine and interpret the power of the test in (a) for the actual value of μ slated in (b).
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Chapter 8 Solutions
Probability and Statistics for Engineering and the Sciences
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