Assume that the data has a normal distribution and the numbe

Assume that the data has a normal distribution and the number of observations is greater than fifty. Find the critical z value used to test a null hypothesis.

? = 0.08; H₁ is ? ? 3.24

Solution

A
Since the alternative hypothesis is that u is not equal to 3.24, direction is not implied; therefore you have a two-sided hypothesis which needs to values - you can rule out A & C. Since alpha is 0.08, and it\'s a two sided hypothesis, look up the cumulative distribution of 1- (alpha/2) which is 1 - .04 which is .96. The cumulative distribution of .96 is 1.75.