Assume σ is known. What are the critical values for testing Hο: µ=200 against H¹: µ ≠ 200 with α = 0.04 ?

a. ±1.41

b.±2.05

c.±1.67

d.±1.75

a. ±1.41

b.±2.05

c.±1.67

d.±1.75

a. ±1.41

b.±2.05

c.±1.67

d.±1.75

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ASSUMING that (a) the underlying population is normally distributed, (b) sampling is random with replacement, and (c) the test statistic you are using is the (standardized) sample mean, you use a two-sided test.

The rejection region is - z_sub_alpha/2 < (sample mean - 200) / (sigma / sqrt(sample size)) < z_sub_alpha/2.

You use a z-test because sigma is known, The level of significance alpha is given to be 0.04. For a standard normal distribution you want z_sub_ 0.02. The two critical values are then, plus or minus z_sub_ 0.02.

To find z_sub_ 0.02, go to OpenOffice Calc and use the function NORMSINV(). (If you do not know, how ask me as a comment.) You get z_sub_ 0.02 = -2.0537.

Check Answer (b) above.

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