SBEG2133

Assignment 4
Hypothesis testing
Date of Submission: 23 January 2023 @23:59

1) An estate agent advertises that it can sell houses in 40 days or less. A random sample of 64
recently sold homes shows a sample mean selling time of 45 days with a standard deviation of
20 days. Using the 5 per cent level of significance, test the validity of the agent’s claim against
a rival’s claim that this is untrue.

2) A study was conducted to determine the effectiveness of stress reduction program. Table
shows before and after treatments of the subject in the program. (a) is this program effective
for reducing stress? (use 5% significance level). (b) construct 95% confidence interval and
margin error.

Sample Before treatment After treatment

1 2 10

2 3 13

3 7 14

4 2 13

5 6 15

3) A car manufacturer states that its new model does 32.5 mpg (miles per gallon). A recent
independent study of 50 of the new cars selected randomly showed a mean mpg of only 30.4
with a standard deviation of 5.3 mpg. Test the view that the manufacturer’s claim is too high
and should be less than 32.5 mpg using a 1 per cent level of significance.

4) A poll of 121 randomly selected students reveals that the mean number of CDs they buy a year is
7.01 with a standard deviation of 3.74. Test the claim that the mean for all students is less than 7.5 CDs
at the 1 per cent level of significance.