Question

It is commonly believed that Wall Street security managers earn an average of $100,000 in bonus each year. At the 5% significance level, test the claim that Wall Street security managers do not earn an average of $100,000 in bonus each year.

Twenty managers were surveyed to ask how much bonus they earned this year. To maintain anonymity, only the P-value from the survey is known: the P-value is 0.02.

(1) Is this a two-tailed, left-tailed, or right-tailed test?

(2) State the conclusion of the hypothesis test.

(3) State the reason for your conclusion.

Ra

Answer 1

Girn significance level d=0.05 p-value *** 0.02 To fest Ho : Ho ! U= 10000 Hi : M & 10ooo This is two toiled test 2 C 0.05 each year Since P-value all Reject the null hypothesis and conclude that He claim is trull, that managers do not earn ang of $100000 in bonus Based on Prvalue (mtria, it P-value La lele Reject Ho P-value is less than significance level we at al significance level il if reglect Mo