CASH COW, an investment firm, has made a list of which companies that they believed were the top 100 highest earning stocks. The mean growth of all of the companies follows a normal distribution with a mean increase of 6.62 points with a standard deviation of 1.24 point increase.

Sasha just earned her MBA and was hired by CASH COW. The first thing she did was to select a different 100 companies and recorded their growth. The mean of her 100 companies was 7.08 points. She made a presentation to the Chief Operating Officer and the Board of Trustees and tried to convince them that CASH COW should invest in her 100 companies because they had made a significant more amount than their current 100 companies. Does the evidence prove her correct?

What is the null hypothesis?

What is the alternative hypothesis?

Is this a one-tailed or a two-tailed test?

What is the test statistic?

What is the P-value?

Do we accept or reject the null hypothesis at the 5% level of significance? (Is it statistically significant at the 5% level? (alpha = .05))