One way to assess the benefits of an MBA degree is to investigate the salaries received by MBA students several years after graduation. In 1998, the Graduate Management Admission Council estimated that the median earnings for graduates of full-time, highlyranked MBA programs four years after graduating was

$96,000 (Selections, Winter 1999). A random sample of 50 graduates from the class of 1996 of a particular highly ranked MBA program were mailed a questionnaire and asked to report their earnings for 2000 Fifteen useable responses were received; 9 indicated earnings greater than $96,000 and 6 indicated earnings below $96,000.

a. Specify the null and alternative hypotheses that should be used in testing whether the median income of graduates of the MBA program was more than

$96,000 in 2000.

b. Conduct the test of part a using a = .05 and draw your conclusion in the context of the problem.

c. What assumptions must hold to ensure the validity of your hypothesis lest?