Describe in detail the steps needed to conduct a significance test. Be sure to address how you write hypotheses, conduct calculations, and write conclusions. Through your response, show me that you know how to complete an entire test.
Answer)
First step is to identify the null and alternate hypothesis.
Null hypothesis means there is no difference.
And alternate hyppthesis is the claim that we are testing.
For example if we are given with the claim that mean is less than 200
So null and alternate hypotheisis would be
Null hyppthesis Ho : u =200 (no difference)
Alternate hypothesis Ha : u < 200 (claim)
Second step is to identity the test
That is if it is left tailed or right tailed or two tailed
(< symbol indicates that it is a left tailed test and > symbol indicates that it is a right tailed test and not equal to sign indicates that it is a two tailed test)
But in our example it is a left tailed test (<)
Third step is to find the test statistics
Test statistics = (obtained mean - claimed mean)/(s.d/√n)
S.d = standard deviation
n = sample size
For example our obtained mean is 198
And population standard deviation is 5
And n = sample size = 25
Then we will use z test statistics (as population standard deviation is given, in case population standard deviation is not given, then we use t test)
Z = (198-200)/(5/√25)
Z = -2
Fourth step is to calculate the p-value
For z test, we will look into the z table
From z table p(z<-2) = 0.0228
Or in case that population standard deviation is unknown and we are provided with sample standard deviation and that is same as 5
So we will use t test
t = -2
From t table for degrees of freedom n-1, 25-1 = 24
And test statistics of -2
P-value would be = 0.025 (one tail)
Step 5
Now we need to compare the p-value with the given significance level
Foe example if given significance level is 0.05
And we can see that p-value in both the cases for t and z test is less than 0.05
So we reject the null hypothesis
And if the given significance level is 0.01
Then in this case, p-value is greater than the given significance level, so here we fail to reject the null hypothesis.
If we reject the null hypothesis
Then the conclusion is
We have enough evidence to support the claim
And if we fail to reject the null hypothesis
Then the conclusion is
We do not have enough evidence to support the claim.
Describe in detail the steps needed to conduct a significance test. Be sure to address how you write hypotheses, conduct calculations, and write conclusions. Through your response, show me that you kn...
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Please Show Work. Thank
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step 1 - set of hypotheses
step 2 - significance level
step 3 - test statistic and distribution (including degrees of
freedom)
step 4 - rejection region (in words)
step 5 - statistical conclusion
step 6 - managerial conclusion
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