ABC Securities Firm paid out record year-end bonuses of $150,000 per employee for 2005.

Suppose we would like to take a sample of employees at the ABC Securities firm to see

whether the mean year-end bonus is different from the reported mean of $150,000 for the

population. Suppose a sample of 40 employees showed a sample mean year-end bonus of

$130,000. Assume a population standard deviation of $30,000. Conduct the hypothesis test at

.05 level of significance.

a) State the null and alternative hypotheses you would use to test whether the year-end

bonuses paid by ABC Securities were different from the population mean.

b) Test the hypothesis using the p-value approach.

c) Test the hypothesis using the critical-value approach.

d) Test the hypothesis using the confidence-interval approach.

e) Clearly state your conclusion based on hypothesis test decisions.