Hannah H. answered 06/18/20
Previous University Finance Tutor
This is going to be a left-tailed test and it Is a proportion. Your null hypothesis is Ho: p ≥ 25%, and the alternative hypothesis is HA: p<25%.
n=998
Phat(sample proportion)=.173
P(Population proportion)=.25
α=.05
It is a left-tailed test. 1.0-.05=.9500
Using a Z-table, we use the probability of .9500 to find the correct Z-score, which is -1.645. So, if we get a test statistic that is less than -1.645, we will reject the Null Hypothesis.
We now standardize the normal random variable using the following standardized form. This will be the test statistic.
Z= (Phat - P) ⁄ √P(1-P) ⁄ n
Z= (.173 - .25)/√.25(.75) ⁄ 998
Z= -5.62
-5.62 is less than -1.645, so we reject the null hypothesis.
P-Value is the smallest αlpha at which H0 can be rejected. Another words, it is the area under the normal curve from the test statistic through the tail that represents the alternative hypothesis (HA). Our test statistic is -5.62. It may be difficult to estimate the probability relevant to this Z-score. Instead, we can approach it differently.
For P-Value, we use the following decision criteria.
We reject the null hypothesis when the P-Value is less than α. If P-Value is greater than alpha, then the test statistic will not lie within the rejection region. Our alpha is .05 at the critical value of -1.645. Our test statistic is -5.62, making the P-Value very small. It is impossible for the area to be more than .05, so we can reject the null hypothesis.