Question

please solve and highlight answers for questions a - c

Use Excel to find the critical value of z for each hypothesis test. (Negative values should be indicated by a minus sign. Round your answers to 3 decimal places.) (a)1 percent level of significance, two-tailed test. Critical value of z (b)5 percent level of significance, right-talled test. Critical value of (c)10 percent level of significance, left-talled test. Critical value of z

Answer 1

Solution:

We have to find values of z for given level of significance and for specified tailed test by using Excel.

Part a)

level of significance = 1% and two tailed test.

That is:

a = 0.01

For two tailed test we use: probability =  

a/2 = 0.01/2 = 0.005

Use following excel command:

=NORM.S.INV( probability )

=NORM.S.INV(0.005)

=-2.576

Since this is two tailed test:

Critical value of z =
4 2576

( Note: +/- sign is already there , just enter 2.576)

Part b)

level of significance = 5% and right tailed test.

That is:

g= 0,05

For right tailed test we use: probability

=1-a=1-0.05 = 0.95

Use following excel command:

=NORM.S.INV( probability )

=NORM.S.INV(0.95)

=1.645

Since this is right tailed test:  

Critical value of z = 1.645

Part c)

level of significance = 10% and left tailed test.

That is:

a = 0.10

For right tailed test we use: probability

=a=0.10

Use following excel command:

=NORM.S.INV( probability )

=NORM.S.INV(0.10)

=-1.282

Since this is left tailed test:  

Critical value of z = -1.282