Purpose: The purpose of this assignment is to provide you with the opportunity to review the elements of a hypothesis test and to prepare a business-style report that you may turn in to a client or a boss. In this case, we will assume that you are preparing a report Bonaventure Business Consulting.[1] In order to complete this assignment, refer to the “Preparation” section for instructions on how to compile the assignment and the “Questions” section for the questions in the assignment.

Preparation:

1. Create a cover page. The cover page should have the following at the top and center of the page. Everything in brackets should be filled in appropriately. Everything else should be directly copied.

Prepared By: Name (& Names of Other Students You Worked With, If Necessary)

Prepared For: Bonaventure Business Consulting

9/20/2020

2. Answer all questions using complete sentences and appropriate formatting. Because this assignment is meant to mirror a report you would turn in to a boss or client, it is imperative that you use appropriate language, proper grammar, and correct spelling. Moreover, all mathematical or statistical expressions should be correct i.e. the symbol for the population average is µ. All pages should be stapled in the upper left-hand corner. Failure to do these things will result in a loss of points.

3. The assignment is due on September 20^th at the beginning of class. The assignments will be submitted in paper. Students should make arrangements to submit assignments early if they know that they will not be in attendance the day the assignment is due. Electronic submissions will only

4. Please see the next page for directions and questions for completing the assignment.

Questions: to answer the questions below, begin by downloading the Seasonally Adjusted, Monthly Unemployment Rate from FRED at the following link: https://fred.stlouisfed.org/series/UNRATE.

Create a Descriptive Statistics table for the unemployment rate.

1. What is the unit of measurement of the unemployment rate?

2. What is the average and standard deviation of the unemployment rate?

3. Your client wants to know about the unemployment rate because they have a project that is only profitable if the average unemployment rate is above 4.5%. What is the null and alternative hypotheses for your client’s test?

4. Is the sample considered large?

5. What is the p-Value of the test? You will need to decide the specific test you are going to estimate, and then calculate the p-Value.

6. Assuming you use a 10% significance level, do you Reject or Fail to Reject the Null Hypothesis?

7. What does the conclusion of your test mean for your client (describe in English what the result of your test means given the context of the problem)?

Graphs: Please create the following graphs with appropriate titles for the axes and an appropriate name for the graph.

1. Create a descriptive statistics plot.
2. Create a line plot that shows the unemployment rate on the y-axis and the Date on the x-axis.
3. Create a histogram of the unemployment using bins that are 0.5 percentage points wide.

[1] The use of Bonaventure Business Consulting is strictly as a fictional company in order to practice writing business reports.