Question
A certain commodity is known to have a price that is stable through time and does not change according to any known trend. Price, however,
A certain commodity is known to have a price that is stable through time and does not change according to any known trend. Price, however, does change from day to day in a random fashion. If the price is at certain level one day, it is as likely to be at any level the next day within some probability bounds approximately given by a normal distribution. The mean daily price is believed to be $14.30. To test the hypothesis that the average price is $14.30 versus the alternative hypothesis that it is not $14.30, a random sample of 16 daily prices is collected. The results are x-bar=$16.48 and s=$5.82. Using ?=0.05, can you reject the null hypothesis?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started