The Federal Reserve Board of Governors recently changed the reporting of its stance on monetary policy from what they termed a "policy bias" to a "balance of risks". A researcher wished to see whether there had been a change in the way financial analysts were interpreting the change in reporting. When the "policy bias" reporting method was used, it was known that only 35% of the Board's decisions were correctly anticipated by analysts in their reports. For the "balance of risks" method, the researcher took a random sample of 56 analysts' reports and found that 26 of these correctly anticipated the Board's decision. Assume that the test is to be carried out at the 10% level.
1. State the direction of the alternative hypothesis used to
test whether the proportion of analysts correctly anticipating the
Board's decision had changed. Type gt (greater than), ge (greater
than or equal to), lt (less than), le (less than or equal to) or ne
(not equal to) as appropriate in the box.
2. Calculate the test statistic, reporting your answer to two
decimal places.
3. Use the tables in the textbook to determine the p-value for the
test (answer to 4 decimal places)
4. Is the null hypothesis rejected for this test? Type yes or
no.
5. Disregarding your answer for 4, if the null hypothesis was
rejected at the 10% level, would the predictive accuracy of the
claims in analysts' reports appear to have changed under the new
system? Type yes or no.
1. Here claim is that p is different from 0.35
vs
2. As n>30, we will use z statistics
Hence
3. P value is
4. As P value is less than alpha=0.10, we reject the null hypothesis
Yes.
The Federal Reserve Board of Governors recently changed the reporting of its stance on monetary policy...
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