Question

You are advised to perform the appropriate hypothesis test using pencil and paper, along with a calculator and statistical tables, and then use your working to answer the questions below.

In past years, the average price per square metre for warehouses in Malaysia has been RM123.50. (RM stands for Malaysian Ringgit). An investor wants to determine whether that figure has changed now. The investor hires a researcher who randomly samples 19 warehouses that are for sale across Malaysia and finds that the mean price per square metre is RM121.17. Assuming that the prices are normally distributed and that the standard deviation is RM5.50, use this sample data to determine whether there is sufficient evidence at the 1% level of significance to assert that the price per square metre has changed.

(a) According to the null hypothesis, the value of the population mean is RM Answer grams. (Answer in the form xxx.xx)

(b) Is the test one-tailed or two-tailed? Answer: Answer (answer 1 or 2)

(c) To 3 decimal places the upper tail critical value of the standardized test statistic for this hypothesis test is: Answer (Answer in the form x.xxx)

(d) To 3 decimal places the test statistic calculated from the sample is: Answer (Answer in the form x.xxx or -x.xxx)

(e) Is the null hypothesis rejected at the 1% level? Answer: Answer (Answer YES or NO)

(f) Does this mean that warehouse prices have changed? Answer: Answer (Answer YES or NO)

(g) Is it necessary to assume the prices per square metre are normally distributed in order to perform this test? Answer (Answer YES or NO)

Answer 1

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Answer:

a) 123.50 (From the given data the average price per square metre for warehouses in Malaysia has been RM123.50 and they want totest his claim)

b) 2 ( Equality so Two -tailed)

c)2.878 ( From t -table at 1% and 18 df)

d)1.8466 ( t = 123.5-121.17/5.5/sqrt(19))

e)No ( Since it is lesser than critical value(

f)No ( Since the null cannot be rejeccted we cannot conclude warehouse prices have changed)

g)Yes ( Since number of samples les than 30 and CLT is not satsified)