Answer)
Null hypothesis Ho : u = 120.
Alternate hypothesis Ha : u not equal to 120.
As the population s.d is known here we can use standard normal z table to estimate the test.
Alpha = 0.2.
As here we have two tailed test we will first divide the alpha into two parts.
0.2/2
= 0.1
From z table, P(z<-1.282) = P(z>1.282) = 0.1
Critical values are -1.282 and 1.282 respectively,
Rejection region is greater than 1.282 and less than -1.282.
Test statistics z = (sample mean - claimed mean)/(s.d/√n)
Z = (130 - 120)/(14/√122) = 7.89.
Since the obtained test statistics is greater than 1.282.
Reject Ho.
We have enough evidence to conclude that students read at a level different from the national average.
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