Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Will improving customer service result in higher stock prices for the companies providing the better service? When a company's satisfaction score has improved over the

Will improving customer service result in higher stock prices for the companies providing the better service? "When a company's satisfaction score has improved over the prior year's results and is above the national average (75.4), studies show its shares have a good chance of outperforming the broad stock market in the long run." The following satisfaction scores of three companies for the 4th quarters of two previous years were obtained from an economic indicator. Assume that the scores are based on a poll of 60 customers from each company. Because the polling has been done for several years, the standard deviation can be assumed to equal 6 points in each case.

Company Year 1 Year 2
Company A 73 76
Company B 74 77
Company C 77 78

(a)

For Company A, is the increase in the satisfaction score from year 1 to year 2 statistically significant? Use

= 0.05.

(Let 1 = the satisfaction score for year 2 and 2 = the satisfaction score for year 1.)

State the hypotheses.

H0: 1 2 = 0

Ha: 1 2 0

H0: 1 2 0

Ha: 1 2 = 0

H0: 1 2 > 0

Ha: 1 2 0

H0: 1 2 0

Ha: 1 2 > 0

H0: 1 2 < 0

Ha: 1 2 = 0

Calculate the test statistic. (Round your answer to two decimal places.)

Calculate the p-value. (Round your answer to four decimal places.)

p-value =

What is your conclusion?

Reject H0. There is insufficient evidence to conclude that the customer service has improved for Company A.Reject H0. There is sufficient evidence to conclude that the customer service has improved for Company A. Do not reject H0. There is insufficient evidence to conclude that the customer service has improved for Company A.Do not reject H0. There is sufficient evidence to conclude that the customer service has improved for Company A.

(b)

Can you conclude that the year 2 score for Company A is above the national average of 75.4? Use

= 0.05.

State the hypotheses.

H0: 75.4

Ha: > 75.4

H0: = 75.4

Ha: 75.4

H0: 75.4

Ha: = 75.4

H0: < 75.4

Ha: = 75.4

H0: 75.4

Ha: < 75.4

Calculate the test statistic. (Round your answer to two decimal places.)

Calculate the p-value. (Round your answer to four decimal places.)

p-value =

What is your conclusion?

Reject H0. There is insufficient evidence to conclude that the score for Company A is above the national average.Do not reject H0. There is sufficient evidence to conclude that the score for Company A is above the national average. Reject H0. There is sufficient evidence to conclude that the score for Company A is above the national average.Do not reject H0. There is insufficient evidence to conclude that the score for Company A is above the national average.

(c)

For Company B, is the increase from year 1 to year 2 statistically significant? Use

= 0.05.

(Let 1 = the satisfaction score for year 2 and 2 = the satisfaction score for year 1.)

State the hypotheses.

H0: 1 2 < 0

Ha: 1 2 = 0

H0: 1 2 0

Ha: 1 2 > 0

H0: 1 2 0

Ha: 1 2 < 0

H0: 1 2 0

Ha: 1 2 = 0

H0: 1 2 = 0

Ha: 1 2 0

Calculate the test statistic. (Round your answer to two decimal places.)

Calculate the p-value. (Round your answer to four decimal places.)

p-value =

What is your conclusion?

Reject H0. There is insufficient evidence to conclude that the customer service has improved for Company B.Reject H0. There is sufficient evidence to conclude that the customer service has improved for Company B. Do not reject H0. There is insufficient evidence to conclude that the customer service has improved for Company B.Do not reject H0. There is sufficient evidence to conclude that the customer service has improved for Company B.

(d)

When conducting a hypothesis test with the values given for the standard deviation, sample size, and , how large must the increase from year 1 to year 2 be for it to be statistically significant? (Round your answer to two decimal places.)

(e)

Use the result of part (d) to state whether the increase for Company C from year 1 to year 2 is statistically significant.

The increase from Year 1 to Year 2 for Company C ---Select--- is is not statistically significant.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting The Ultimate Guide To Accounting For Beginners

Authors: Greg Shields

1st Edition

1546332820, 978-1546332824

More Books

Students also viewed these Accounting questions

Question

Outline five major criticisms of humanistic psychologies.

Answered: 1 week ago

Question

Summarize life insurance and disability insurance.

Answered: 1 week ago

Question

Discuss voluntary benefits.

Answered: 1 week ago

Question

Identify employee service benefits.

Answered: 1 week ago