A life insurance salesperson claims the average worker in the city of Cincinnati has no more than
Question:
A life insurance salesperson claims the average worker in the city of Cincinnati has no more than $25,000 of personal life insurance. To test this claim, you randomly sample 100 workers in Cincinnati. You find that this sample of workers averages $26,650 of personal life insurance with a standard deviation of $12,000. Determine whether the evidence is enough to reject the salesperson’s claim.Assume α = 0.05.
a) State null and alternative hypothesis
b) Determine the level of significance and identify if the test requires one-sided or two-sided test
c) Establish the decision rule using critical value, test statistic and p value method
d) Write a concluding statement
Statistics for Business and Economics
ISBN: 978-0132930192
8th edition
Authors: Paul Newbold, William Carlson, Betty Thorne