Question

Use Excel to find the critical value of z for each hypothesis test. (Negative values should be indicated by a minus sign. Round your answers to 3 decimal places.) (a) 9 percent level of significance, two-tailed test. Critical value of z ± __________ (b) 7 percent level of significance, right-tailed test. Critical value of z _______ (c) 4 percent level of significance, left-tailed test. Critical value of z___________.

Answer 1

Answer)

A)

Excel command to find the area in tail for normal distribution is,

NORMDIST(x,mean,SD,cumulative)

And to find the critical value for given area or probability is

NORM.S.INV(Area)

As here test is two tailed, we will divide the given alpha into two equal parts.

0.09/2 = 0.045

So command is,

NORM.S.INV(0.045)

Z critical = -1.69 and 1.69

B)

It is a right tailed test, so we will have a positive critical value.

NORM.S.INV(0.07)

= 1.47

C)

Left tailed means we will have a negative value.

NORM.S.INV(0.04)

= -1.75