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Sol Tutorial Set 5 - Hypothesis

The Accra Metropolitan Assembly is considering a new towing car and conducted a study of 36 vehicles towed. Based on a sample mean of 140.2 seconds, which is better than the current mean of 142 seconds, there is not enough evidence to recommend the new towing car. Bel-Aqua Drilling tested their new drilling machine against the old one using 100 samples from each. With sample means of 0.501 and 0.509 inches respectively, the test shows the new machine has a smaller diameter and the maintenance team should adjust it. Comparing insurance and IT stocks traded on the Ghana stock exchange, with sample sizes of 21 and 28 and means of 4.28 and 4.1,

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92 views4 pages

Sol Tutorial Set 5 - Hypothesis

The Accra Metropolitan Assembly is considering a new towing car and conducted a study of 36 vehicles towed. Based on a sample mean of 140.2 seconds, which is better than the current mean of 142 seconds, there is not enough evidence to recommend the new towing car. Bel-Aqua Drilling tested their new drilling machine against the old one using 100 samples from each. With sample means of 0.501 and 0.509 inches respectively, the test shows the new machine has a smaller diameter and the maintenance team should adjust it. Comparing insurance and IT stocks traded on the Ghana stock exchange, with sample sizes of 21 and 28 and means of 4.28 and 4.1,

Uploaded by

father strech
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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UNIVERSITY OF GHANA BUSINESS SCHOOL

UGBS 301 – QUANTITATIVE METHODS FOR BUSINESS


TUTORIAL SET 5 (MARCH 2023)
HYPOTHESIS TESTING
Not to be submitted

1. The Accra Metropolitan Assembly (AMA) is considering introducing a new towing car for
towing broken down vehicles at Makola market. Records indicate that the current mean towing
time for the current car is 142 seconds with a standard deviation of 15 seconds. Management of
the assembly will not recommend the new towing car unless there is substantial evidence to
suggest that it is better than the existing one. To test whether the new car actually has a lower
service rate, a sample of 36 broken down vehicles were used to determine the action management
should take. Perform the necessary hypothesis test and advice management on the optimal
decision given a sample mean of 140.2

𝐻0 : 𝜇 ≥ 142

𝐻𝐴 : 𝜇 < 142

𝑥̅ − 𝜇 140.2 − 142
𝑧= 𝜎 = = −𝟎. 𝟕𝟐
15
√𝑛 √36

𝛼 = 0.05

-1.645 -0.72

Since the test statistic (-0.72) is greater than critical value (-1.645), we do not reject Ho
2. Bel-Aqua Drilling Company provides water drilling services for people in Accra and its environs.
Its new drilling machine, with a standard deviation of 0.025 inches is believed to have a larger
average diameter than the old drilling machine which has a standard deviation of 0.034 inches. A
new test is to be conducted to verify this claim. If the test proves that the new drilling machine
has a larger diameter than the old machine, the maintenance team will adjust the diameters
downward or they will replace the machine. Help the team in making this decision given the
mean for the new machine and old machine as 0.501 and 0.509 respectively and a random sample
of 100 drillings are made from each machine.

𝐻0 : 𝜇1 ≥ 𝜇2 𝑂𝑅 𝜇1 − 𝜇2 ≥ 0
𝐻𝐴 : 𝜇1 < 𝜇2 𝑂𝑅 𝜇1 − 𝜇2 < 0

(𝑥
̅̅̅1 − 𝑥̅2 ) − (𝜇1 − 𝜇2 ) 0.501 − 0.509
𝑧= = = −𝟏. 𝟗𝟎
𝜎2 𝜎 2 2 2
√ 1 + 2 √0.025 + 0.034
𝑛1 𝑛1 100 100

-1.645
Reject Ho

3. As a researcher at local investment firm, you have been provided with the following information
about the two main stocks traded at the Ghana stock exchange (GSE)
Assume 𝛼 = 0.05

IT Stocks Insurance Stocks


Number of stocks = 21 Number of stocks= 28
Sample mean= 4.28 Sample mean= 4.1
Sample standard deviation =1.9 Sample standard deviation = 1.7

Is there a difference in the yield provided by the two stocks?

𝐻0 : 𝜇1 = 𝜇2

𝐻𝐴 : 𝜇1 ≠ 𝜇2

z 
x 1  x2   μ 1  μ2 
1 1
sp 
n1 n2

(21 − 1)1.92 + (28 − 1)1.72


𝑠𝑝 = √ = 𝟏. 𝟕𝟖𝟕
(21 + 28) − 2
(4.28 − 4.1) − 0
𝑡= = 𝟎. 𝟑𝟒𝟖𝟗
1 1
1.787√ +
21 28
𝑡𝛼,𝑛1+𝑛2−2 𝑡0.05,21+28−2 0.025, 47 = 𝟐. 𝟎𝟏𝟕
2 2

2.02
4. Letap Pharmaceuticals has brought out a product that is meant to reduce the weight of women. To
test the efficacy of the drug, the average weight of a sample of 8 women were weighed before the
administration of the drug. After a month of application, the women were weighed again and their
weights are as given below:

Woman 1 2 3 4 5 6 7 8

Before application 60 81 90 102 69 77 150 45

After
56 71 71 99 60 50 100 46
application

Provide the necessary test to prove that the drug is effective.

𝐻0: 𝜇𝑑 = 0
𝐻𝐴: 𝜇𝑑 ≠ 0

−15.125−0
𝑡= 16.7625 = −𝟐. 𝟓𝟓
√8

Type equation here.

-2.365

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