A financial company that acts as a stockbroker is interested in examining the monetary value of the trades it has to process each day. It is known that the value of trades each day follow a Normal distribution for its population distribution, with a mean of 1000 and a standard deviation of 100.

Now the business decides to obtain a new sample of data on the value of trades each day. In the sample of data it has 100 observations, and with a sample mean of 800. The firm wishes to perform a hypothesis test on the population mean to test if the population mean has changed, based on this sample of data.

The firm now decides to do a 1 sided hypothesis test at the 1% significance level to see if the population mean has increased. What is your conclusion on the population mean? Show the mathematical steps in your calculation, including formally stating your hypothesis, and how you arrived at your conclusion.

Based on your statistical conclusion, interpret your conclusion in terms of the advantage or disadvantage to the firm?