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6.(i) A chief financial officer (CFO) of a large company claims that the employees of his
company have an average earning (μ) of more than ₹ 2100 per month. To test the claim,
Mr. Jack took a sample of 64 employees and found the sample average income of
₹2135 with standard deviation equal to ₹ 1360.
a) State the appropriate null and alternative hypotheses.
b) Based on the sample information, with α =2.5%, test the hypothesis stated in part (a).
What conclusion do you draw? Use p-value approach.
c) Would your conclusion in part (b) remain unchanged if α =1%, is used instead.
d) Calculate type II error (β) in part (b), for true μ=₹2150. Show diagrammatically.
e) If the claim of CFO is that the employees of his company have an average earning of
₹ 2100 per month, how would you test this claim using p value approach, with α
=2.5%.
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