Let x be a random variable representing dividend yield of bank stocks. We may assume that x has a normal distribution with ? = 2.5%. A random sample of 10 bank stocks gave the following yields (in percents). 5.7     4.8     6.0     4.9     4.0     3.4     6.5     7.1     5.3     6.1 The sample mean is  = 5.38%. Suppose that for the entire stock market, the mean dividend yield is ? = 4.9%. Do these data indicate that the dividend yield of all bank stocks is higher than 4.9%? Use ? = 0.01. (a)  What is the level of significance?      State the null and alternate hypotheses. Will you use a left-tailed, right-tailed, or two-tailed test? H0: ? = 4.9%; H1: ? > 4.9%; right-tailed H0: ? > 4.9%; H1: ? = 4.9%; right-tailed     H0: ? = 4.9%; H1: ? ≠ 4.9%; two-tailed H0: ? = 4.9%; H1: ? < 4.9%; left-tailed

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Let x be a random variable representing dividend yield of bank stocks. We may assume that x has a normal distribution with ? = 2.5%. A random sample of 10 bank stocks gave the following yields (in percents).

  • 5.7  
  •  
  • 4.8  
  •  
  • 6.0  
  •  
  • 4.9  
  •  
  • 4.0  
  •  
  • 3.4  
  •  
  • 6.5  
  •  
  • 7.1  
  •  
  • 5.3  
  •  
  • 6.1

The sample mean is  = 5.38%. Suppose that for the entire stock market, the mean dividend yield is ? = 4.9%. Do these data indicate that the dividend yield of all bank stocks is higher than 4.9%? Use ? = 0.01.

(a)

 What is the level of significance? 
 
 
State the null and alternate hypotheses. Will you use a left-tailed, right-tailed, or two-tailed test?
H0: ? = 4.9%; H1: ? > 4.9%; right-tailed
H0: ? > 4.9%; H1: ? = 4.9%; right-tailed    
H0: ? = 4.9%; H1: ? ≠ 4.9%; two-tailed
H0: ? = 4.9%; H1: ? < 4.9%; left-tailed
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