Hypothesis Testing

S. Nakale - School of Accounting

ABA 3692 Summer Term 2023

 Learning outcomes
✓ Understand the concept and use of hypothesis testing in inferential
statistics.
✓ Perform hypothesis tests for population mean, population proportion and
population variance.
✓ Interpret the results of a hypothesis test and translate them into practical
conclusions to guide decision making.

ABA 3692 Summer Term 2023

Introduction
• Claims or statements made about population parameter values can be
tested statistically.
• On the basis of evidence from sample data, hypothesised/claimed value of
population parameter can be accepted as most likely to be true or rejected
as unlikely to be true.

Examples of claims that can be made about population parameters:

1. A Retailers Association believes that the average amount spent on grocery by shoppers on each visit to
a supermarket is N$ 1800.
2. A mobile phone service provider claims that it has at least 25% of the mobile phone market.
3. A quality inspector believes that the variability of the fills of all 500 ml hand sanitisers produced is at
most 5 ml.

• Hypothesis testing is a five step procedure.

ABA 3692 Summer Term 2023
Step 1: Formulating the Hypotheses

▪ Hypothesis testing begins with a value being assumed for a given population
parameter.
▪ The hypothesised value is derived from a claim/assumption or a research question.
▪ Two statistical hypotheses, the null 𝐻0 and alternative 𝐻𝑎 hypotheses, are formulated
based on the hypothesised population parameter value.
▪ The null hypothesis usually represents the status quo while the alternative hypothesis is
the opposite of the null hypothesis.
▪ It is not always obvious how the null 𝐻0 and alternative 𝐻𝑎 hypotheses should be
formulated.
▪ The hypotheses must be structured appropriately so that the hypothesis testing
conclusion provides the information the researcher or decision maker wants.
▪ Important to understand the context of the situation when formulating the
hypotheses.
▪ In some cases it is easier to identify the alternative hypothesis first. In other cases the
null hypothesis is easier
ABA 3692 Summer Term 2023
Step 1: Formulating the Hypotheses
▪ Three possible forms of hypotheses:

Two tailed test One tailed test

Upper tail test:
𝐻𝑜 : 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑝𝑎𝑟𝑎𝑚𝑒𝑡𝑒𝑟 = ℎ𝑦𝑝𝑜𝑡ℎ𝑒𝑠𝑖𝑠𝑒𝑑 𝑣𝑎𝑙𝑢𝑒 𝐻𝑜 : 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑝𝑎𝑟𝑎𝑚𝑒𝑡𝑒𝑟 ≤ ℎ𝑦𝑝𝑜𝑡ℎ𝑒𝑠𝑖𝑠𝑒𝑑 𝑣𝑎𝑙𝑢𝑒
𝐻𝑎 : 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑝𝑎𝑟𝑎𝑚𝑒𝑡𝑒𝑟 ≠ ℎ𝑦𝑝𝑜𝑡ℎ𝑒𝑠𝑖𝑠𝑒𝑑 𝑣𝑎𝑙𝑢𝑒 𝐻𝑎 : 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑝𝑎𝑟𝑎𝑚𝑒𝑡𝑒𝑟 > ℎ𝑦𝑝𝑜𝑡ℎ𝑒𝑠𝑖𝑠𝑒𝑑 𝑣𝑎𝑙𝑢𝑒

Lower tail test:

𝐻𝑜 : 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑝𝑎𝑟𝑎𝑚𝑒𝑡𝑒𝑟 ≥ ℎ𝑦𝑝𝑜𝑡ℎ𝑒𝑠𝑖𝑠𝑒𝑑 𝑣𝑎𝑙𝑢𝑒
𝐻𝑎 : 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑝𝑎𝑟𝑎𝑚𝑒𝑡𝑒𝑟 < ℎ𝑦𝑝𝑜𝑡ℎ𝑒𝑠𝑖𝑠𝑒𝑑 𝑣𝑎𝑙𝑢𝑒

Note:
• The equality (=, ≤ 𝑜𝑟 ≥)always appears in the null hypothesis.

• All possibilities must be exhausted by the null and alternative hypotheses.

ABA 3692 Summer Term 2023
Step 1: Formulating the Hypotheses
▪ Null hypothesis as a claim or an assumption to be challenged:

• We might begin with a belief or assumption that a statement about the value of a
population parameter is true.

• We then use a hypothesis test to challenge the assumption and determine if there is
statistical evidence to conclude that the assumption is incorrect.

Example: The label on a soft drink bottle states that it contains 330 ml.

Hypotheses to be tested:
𝐻𝑜 : 𝑡ℎ𝑒 𝑙𝑎𝑏𝑒𝑙 𝑖𝑠 𝑐𝑜𝑟𝑟𝑒𝑐𝑡.
𝐻𝑎 : 𝑡ℎ𝑒 𝑙𝑎𝑏𝑒𝑙 𝑖𝑠 𝑖𝑛𝑐𝑜𝑟𝑟𝑒𝑐𝑡.

ABA 3692 Summer Term 2023

Step 1: Formulating the Hypotheses
▪ Alternative hypothesis as a research question/objective:

• Many applications of hypothesis testing involve an attempt to gather evidence in

support of a research question.

• In such cases, it is often best to begin with the alternative hypothesis and make it the
conclusion that the researcher hopes to support.

• The conclusion that the research hypothesis is true is made if the sample data provide
sufficient evidence to show that the null hypothesis can be rejected.

Example : A new sales force bonus plan is developed in an attempt to increase sales.
Hypotheses to be tested:

𝐻𝑜 : 𝑡ℎ𝑒 𝑛𝑒𝑤 𝑏𝑜𝑛𝑢𝑠 𝑝𝑙𝑎𝑛 𝑑𝑜𝑒𝑠 𝒏𝒐𝒕 𝑖𝑛𝑐𝑟𝑒𝑎𝑠𝑒 𝑠𝑎𝑙𝑒𝑠.

𝐻𝑎 : 𝑡ℎ𝑒 𝑛𝑒𝑤 𝑏𝑜𝑛𝑢𝑠 𝑝𝑙𝑎𝑛 𝑑𝑜𝑒𝑠 𝑖𝑛𝑐𝑟𝑒𝑎𝑠𝑒 𝑠𝑎𝑙𝑒𝑠.

ABA 3692 Summer Term 2023

Step 2: Specify the level of significance (𝜶)
▪ Because hypothesis tests are based on sample data, we must allow for the possibility of errors.

▪ A Type I error is rejecting the null hypothesis when it is true.

▪ A Type II error is not rejecting the null hypothesis when it is false.

▪ The probability of making a Type I error when the null hypothesis is true is called the level of
significance denoted by 𝛼.

▪ Applications of hypothesis testing that only control the Type I error are often called significance
tests.
Note: Common choices for 𝛼 are 0.01, 0.05 and 0.1

• The level of significance is the area/probability in the tails of a sampling distribution and this is
where the rejection region is located.
• In a two 𝛼tailed test, 𝛼 is split between the lower and upper regions of rejection and each tail
contains 2 .
• For a lower tailed test, 𝛼 is contained in the lower tail of the sampling distribution while for an
upper tailed distribution, 𝛼 is contained in the upper tail of the sampling distribution.
ABA 3692 Summer Term 2023
Step 3: Calculate the Sample Test Statistic

• Sample data is used to calculate a sample statistic that provides the evidence to test the
validity of the null hypothesis.

• The sample statistic must be expressed in standardised unit of measure as the critical limits of
the region of non-rejection.

• Formulas to calculate sample test statistics are available depending on the type of
hypotheses test.

ABA 3692 Summer Term 2023

Step 4: Compare the Sample Test Statistic to the Critical values/limits of the region
of non-rejection

• The critical limits/values of the region of non-rejection (of the null hypothesis) depends on the
sampling distribution and the level of significance defined in step 2.

• The sample statistic either lies within the region of non-rejection or it lies in the rejection region
of the null hypothesis.

• General Rejection rules:

Lower tail: Reject 𝐻0 𝑖𝑓 𝑠𝑎𝑚𝑝𝑙𝑒 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≤ 𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 𝑣𝑎𝑙𝑢𝑒

Upper tail: Reject 𝐻0 𝑖𝑓 𝑠𝑎𝑚𝑝𝑙𝑒 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≥ 𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 𝑣𝑎𝑙𝑢𝑒

Two-tailed: Reject 𝐻0 𝑖𝑓 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≤ 𝑠𝑚𝑎𝑙𝑙𝑒𝑠𝑡 𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 𝑣𝑎𝑙𝑢𝑒 or 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≥

𝑙𝑎𝑟𝑔𝑒𝑠𝑡 𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 𝑣𝑎𝑙𝑢𝑒

NB: A two tailed test always has two critical values.

ABA 3692 Summer Term 2023

Step 5: Draw Statistical and practical conclusions

Statistical conclusion:
• Depending on the outcome of the comparison in Step 4, the null hypothesis is either rejected or not rejected at
the given level of significance. This conclusion is based on the sample evidence and level of significance for the
test.

Practical conclusion:
• This considers the claim, assumption or research question to be answered. A practical interpretation of the
statistical conclusion above should be given i.e. if the null hypothesis is rejected, what does it mean in terms of
the claim, assumption or research question given the available sample evidence ?

ABA 3692 Summer Term 2023

The p-value Approach to Hypothesis Testing

• p-value approach : making use of probabilities to determine whether the null hypothesis can
be rejected or not (STEP 4).
• A p-value is the probability of observing the sample statistic or a more extreme value if the
hypotheised parameter value is assumed to be true.
• A small p-value i.e. close to zero indicates a low probability of observing the sample statistic if the null hypothesis
were true and this provides strong evidence to reject 𝐻0 .
• A large p-value i.e. close to one indicates a high probability of observing the sample statistic if the null
hypothesis were true and this provides strong evidence not to reject 𝐻0 .
• For a lower tailed test, the p-value is the area/probability in the lower tail of a sampling
distribution from the sample statistic.
• For an upper tailed test, the p-value is the area/probability in the upper tail of a sampling
distribution from the sample statistic.
• For a two tailed test, the p-value is the combined area/probability in the lower and upper
tails of the sampling distribution.

ABA 3692 Summer Term 2023

Hypothesis Testing about Population Mean
σ known:
Critical value approach
ഥ−𝝁𝟎
𝒙
• Test statistic: 𝒛 = 𝝈 has a standard normal probability distribution.
𝒏
• For a lower tail test: the standard normal probability distribution table can be used to find
the critical value −𝑧𝛼 , a z –value with an area of 𝛼 in the lower tail.
• For an upper tail test: the standard normal probability distribution table can be used to find
the critical value 𝑧𝛼 , a z –value with an area of 𝛼 in the upper tail.
• For a two tailed test: the standard normal probability distribution table can be used to find
the critical values −𝑧𝛼/2 𝑎𝑛𝑑𝑧𝛼/2 , z –values with an area of 𝛼/2 in the lower tail and upper tail,
respectively.
• Rejection rule:
Lower tail: Reject 𝐻0 𝑖𝑓 𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≤ − 𝑧𝛼

Upper tail: Reject 𝐻0 𝑖𝑓 𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≥ 𝑧𝛼

Two-tailed: Reject 𝐻0 𝑖𝑓 𝑧 𝑡𝑒𝑠𝑡𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≤ − 𝑧𝛼/2 or 𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≥ 𝑧𝛼/2

ABA 3692 Summer Term 2023

Exercise 21
The Grocery Retailers Association believes that the average amount spent on groceries by
shoppers on each visit to a supermarket is N$ 1800. To test this belief, the association
commissioned market research to conduct a survey among a random sample of 100 customers
at all supermarkets.

Based on the survey, the average value of grocery purchase was found to be N$ 1750. Assume
that the population of grocery purchase values is normally distributed with a variance of 4624
(N$ squared).

Required:

What can the retailers association conclude about the average amount spent by retailers on
grocery shoppers on each visit to a supermarket? Conduct a hypothesis test at a 1% level of
significance and use the critical value approach.

ABA 3692 Summer Term 2023

Hypothesis Testing about Population Mean
σ known
p-value approach
ҧ 0
𝑥−𝜇
• Test statistic = 𝜎 has a standard normal probability distribution.
𝑛

• For a lower tail test: 𝑝 − 𝑣𝑎𝑙𝑢𝑒 = 𝑃(𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 > 𝑧)

• For an upper tail test: 𝑝 − 𝑣𝑎𝑙𝑢𝑒 = 𝑃(𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 < 𝑧)
• For a two tailed test: 𝑝 − 𝑣𝑎𝑙𝑢𝑒 = 𝟐(𝑃 𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 < 𝑧 )

• Rejection rule:
Lower tail: Reject 𝐻0 𝑖𝑓 𝑝 − 𝑣𝑎𝑙𝑢𝑒 ≤ 𝛼
Upper tail: Reject 𝐻0 𝑖𝑓 𝑝 − 𝑣𝑎𝑙𝑢𝑒 ≤ 𝛼
Two-tailed: Reject 𝐻0 𝑖𝑓 𝑝 − 𝑣𝑎𝑙𝑢𝑒 ≤ 𝛼

ABA 3692 Summer Term 2023

Exercise 22
The Grocery Retailers Association believes that the average amount spent on groceries by
shoppers on each visit to a supermarket is N$ 1800. To test this belief, the association
commissioned market research to conduct a survey among a random sample of 100 customers
at all supermarkets.

Based on the survey, the average value of grocery purchase was found to be N$ 1750. Assume
that the population of grocery purchase values is normally distributed with a variance of 4624
(N$ squared).

Required:

What can the retailers association conclude about the average amount spent by retailers on
grocery shoppers on each visit to a supermarket? Conduct a hypothesis test at a 1% level of
significance and use the p-value approach.

ABA 3692 Summer Term 2023

 Exercise 23
In a random sample of 100 Namibian households, the average weekly expenditure on
public transport is found to be N$ 180 with a standard deviation of N$ 60. The department of
Transport maintains that the average weekly spending is only N$ 150 per household. You are
tasked to test the government’s claim.

Required:

a) State the null and alternative hypotheses and determine the critical value(s) at the 5%
and 10% levels of significance.

b) Calculate the sample test statistic and draw an appropriate conclusion.

ABA 3692 Summer Term 2023

Hypothesis Testing about Population Mean
σ Unknown:
Critical value approach
ഥ−𝝁𝟎
𝒙
• Test statistic: 𝒕 = 𝒔 has a t distribution with n-1 degrees of freedom.
𝒏
• For a lower tail test: the t distribution table can be used to find the critical value −𝑡𝛼 , a t –
value with an area of 𝛼 in the lower tail.
• For an upper tail test: the t distribution table can be used to find the critical value 𝑡𝛼 , a t –
value with an area of 𝛼 in the upper tail.
• For a two tailed test: the t distribution table can be used to find the critical values
−𝑡𝛼/2 𝑎𝑛𝑑 𝑡𝛼/2 , t –values with an area of 𝛼/2 in the lower tail and upper tail, respectively.
• Rejection rule:
Lower tail: Reject 𝐻0 𝑖𝑓 𝑡 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≤ − 𝑡𝛼

Upper tail: Reject 𝐻0 𝑖𝑓 𝑡 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≥ 𝑡𝛼

Two-tailed: Reject 𝐻0 𝑖𝑓 𝑡 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≤ − 𝑡𝛼/2 or 𝑡 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≥ 𝑡𝛼/2

ABA 3692 Summer Term 2023
Exercise 24

Question 5; Normal Examination 2022

ABA 3692 Summer Term 2023

Exercise 25
A local restaurant, operating on a take-away basis due to Covid-19 regulations, claims that it
takes less than 40 minutes, on average, to deliver their orders.

To test this claim, eight delivery times are randomly selected and their delivery times (in minutes)
are given below:

42 50 42 40 45 51 46 44

Required:

What can be concluded about the average delivery times of the restaurant Conduct a
hypothesis test at a 5% level of significance and use the critical value approach.

ABA 3692 Summer Term 2023

Hypothesis Testing about Population Proportion
Critical value approach
ഥ−𝒑𝟎
𝒑
• Test statistic: 𝒛 = has a standard normal probability distribution.
𝒑𝟎 (𝟏−𝒑𝟎 )
𝒏

• For a lower tail test: the standard normal probability distribution table can be used to find
the critical value −𝑧𝛼 , a z –value with an area of 𝛼 in the lower tail.
• For an upper tail test: the standard normal probability distribution table can be used to find
the critical value 𝑧𝛼 , a z –value with an area of 𝛼 in the upper tail.
• For a two tailed test: the standard normal probability distribution table can be used to find
the critical values −𝑧𝛼/2 𝑎𝑛𝑑𝑧𝛼/2 , z –values with an area of 𝛼/2 in the lower tail and upper tail,
respectively.
• Rejection rule:
Lower tail: Reject 𝐻0 𝑖𝑓 𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≤ − 𝑧𝛼

Upper tail: Reject 𝐻0 𝑖𝑓 𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≥ 𝑧𝛼

Two-tailed: Reject 𝐻0 𝑖𝑓 𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≤ − 𝑧𝛼/2 or 𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≥ 𝑧𝛼/2

ABA 3692 Summer Term 2023
Hypothesis Testing about Population Proportion
p-value approach
ҧ 0
𝑝−𝑝
• Test statistic:𝑧 = has a standard normal probability distribution.
𝑝0 (1−𝑝0 )
𝑛

• For a lower tail test: 𝑝 − 𝑣𝑎𝑙𝑢𝑒 = 𝑃(𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 > 𝑧)

• For an upper tail test: 𝑝 − 𝑣𝑎𝑙𝑢𝑒 = 𝑃(𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 < 𝑧)
• For a two tailed test: 𝑝 − 𝑣𝑎𝑙𝑢𝑒 = 2(𝑃 𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 < 𝑧 )

• Rejection rule:
Lower tail: Reject 𝐻0 𝑖𝑓 𝑝 − 𝑣𝑎𝑙𝑢𝑒 ≤ 𝛼

Upper tail: Reject 𝐻0 𝑖𝑓 𝑝 − 𝑣𝑎𝑙𝑢𝑒 ≤ 𝛼

Two-tailed: Reject 𝐻0 𝑖𝑓 𝑝 − 𝑣𝑎𝑙𝑢𝑒 ≤ 𝛼

ABA 3692 Summer Term 2023

Exercise 26
A local mobile phone service provider, XYZ Mobile, claims that it has at least 25% of the mobile
phone market. A competitor conducted a survey recently and argues that XYZ Mobile is
overestimating their market share.

A random sample of 100 mobile users is selected and it if found that 24 users subscribe to XYZ
Mobile as a service provider.

Required:

a) What can be concluded about XYZ Mobile’s share of the mobile phone market? Conduct
the hypothesis test at a 1% level of significance and use the critical value approach.

ABA 3692 Summer Term 2023

 Exercise 27
In a random sample of 1000 householders, 650 are found to be better off than they were five
years ago. The government claims that three-quarters of the households in the country are
better off than they were five years ago. You are asked to test the government’s claim.

Required:

a) State the null and alternative hypotheses and determine the critical value(s) at the 5%
level of significance.

b) Calculate the sample test statistic and draw an appropriate conclusion.

c) Calculate the p-value for the hypothesis.

ABA 3692 Summer Term 2023

Hypothesis Testing about Population Variance
Critical value approach
(𝒏−𝟏)𝒔𝟐
• Test statistic: 𝝌 = 𝟐
has a chi-square distribution with df = n-1.
𝝈𝟐𝟎

• For a lower tail test: the chi-square distribution tables can be used to find the critical value 𝜒(1−𝛼)
2
,a
chi-square value with an area of 𝛼 in the lower tail.

• For an upper tail test: the chi-square distribution tables can be used to find the critical value 𝜒𝛼2 , a
chi-square value with an area of 𝛼 in the upper tail.
• For a two tailed test: the chi-square distribution tables can be used to find the critical
𝛼
values 𝜒(1−𝛼/2)
2 2
𝑎𝑛𝑑 𝜒(𝛼/2) , chi-square values with areas of 2 in the lower and upper tails.
• Rejection rule:
Lower tail: Reject 𝐻0 𝑖𝑓𝜒 2 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≤ 𝜒(1−𝛼)
2

Upper tail: Reject 𝐻0 𝑖𝑓𝜒 2 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≥ 𝜒𝛼2

Two-tailed: Reject 𝐻0 𝑖𝑓𝜒 2 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≤ 𝜒(1−𝛼/2)

2
or 𝜒 2 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≥ 𝜒(𝛼/2)
2

ABA 3692 Summer Term 2023

Exercise 28
A machine is set to fill hand sanitisers with 500 ml. To meet quality standards, the standard
deviation of the fills of all the bottles should not be more than 5ml.

To test this requirement, a random sample of 20 filled bottles is selected and their volumes
measured. The standard deviation is found to be 6.18 ml.

Required:

a) Conduct the hypothesis test at a 5% level of significance and determine whether the filling
machine is operating within the quality standards.

ABA 3692 Summer Term 2023

 Exercise 29
The test scores of a particular subject selected from a local University of a sample of 5
students are given below:

70 80 60 90 75
Required:

At 90% confidence, conduct a hypothesis test to determine if the variance of the population
is less than or equal to 50. Use the critical value approach.

ABA 3692 Summer Term 2023

 Exercise 30

Question 4 Supp/Special exam 2022

ABA 3692 Summer Term 2023

 Exercise 31

Section A: Questions 15 to 25 Normal exam 2022

ABA 3692 Summer Term 2023

 References
❑ Anderson D.R, Sweeney D.J and Williams T.A, 2011. Statistics for Business
and Economics, eleventh edition.

❑ Wegner T, 2016. Applied Business Statistics: Methods and Excel-Based

Applications, fourth edition.

ABA 3692 Summer Term 2023