Question

Use this information for all questions below: My best friend is planning to sell a house. So she collects a sample of 100 randomly selected houses in her area. The average house price based on the sample is $650,000. My friend contacts her acquaintance in the City Office who tells her that the standard deviation of the house prices based on all houses in her area (i.e. population standard deviation) is $250,000.

Question 3: An outside expert tells my friend that he believes that the average house price of a house in the area is $620,000. Should my friend reject the hypothesis that the average house price is $620,000, vs. alternative that it is not (two-sided)? My friend uses alpha (?) 5%

Answer 1