# Question

According to Fidelity Investments, the average 401(k) account balance was $ 77,300 in 2013. To test if this average has recently changed, suppose a sample of 30 401(k) plans was recently selected, and it was found that the average 401(k) balance was $ 85,200. Assume the population standard deviation is $ 21,000. Using σ = 0.02, answer the following:

a. State the null and alternative hypothesis.

b. What conclusions can be made about the current average balance of 401(k) accounts?

c. Determine the p value for this test and interpret its meaning.

d. Verify your results using PHStat.

e. If σ = 0.05 had been used rather than σ = 0.02, would the conclusions differ? Comment on this choice of alpha.

a. State the null and alternative hypothesis.

b. What conclusions can be made about the current average balance of 401(k) accounts?

c. Determine the p value for this test and interpret its meaning.

d. Verify your results using PHStat.

e. If σ = 0.05 had been used rather than σ = 0.02, would the conclusions differ? Comment on this choice of alpha.

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