A plan for an executive travelers’ club has been developed by airline on the premise that 5% of its current customers would qualify for membership. A random sample of 500 customers yielded 40 who would qualify.

1. Write down the null and alternative hypotheses. .

2. Explain whether this is a one-sided or a two-sided test, and why.

3. What is the value of the test statistic for your observed results? .

4. What is the p-value for your observed results? .

5. What is your conclusion? Please use words that a non-statistics student would understand, and justify your answer. Assume a significance level of .05. .

6. Based on your conclusion, what type of error are you risk at?.