Question

9-92. Many companies have changed their employee retirement plans to ones based on 401(k) savings. An article in a business magazine states that the average 401(k) balance is $91,800 (source: Donna Rosato, 401(k) savings hit a record high. How do you stack up?" http://time.com/money, Apr. 29, 2015). A regional brokerage firm wishes to test whether its clients' accounts average more than this amount. A firm manager selects a random sample of 55 clients and finds a sample average of $94,785. a. If the standard deviation for the amounts in the clients' accounts is $17,340, determine if the manager is correct in her assumption that the firm's clients have more than the reported average amount. Use a significance level of 0.025 and discuss any assumptions you made to answer question. b. Based on your answer to part a, what type of statistical error could have been made?

Answer 1