1. ## hypothesis testing

A random sample of 76 percentage changes in promised health benefits was observed. The sample mean percentage change was 0.078 and the sample standard deviation 0.201. Find and interpret the p value of a test of the null hypothesis that the population mean percentage change is 0 against a 2 sided alternative.

I am stuck. I get the value (0.078-0) /(0.201/ sqroot 76) = 3.38 but then I a not able to find this number in the table of the book because it ends at 0.005 for alfa. And anyway after I get that alfa how to go on?

I seriously need your help to get over this course. Thank you so so much. Seriously.

2. Originally Posted by 0123
A random sample of 76 percentage changes in promised health benefits was observed. The sample mean percentage change was 0.078 and the sample standard deviation 0.201. Find and interpret the p value of a test of the null hypothesis that the population mean percentage change is 0 against a 2 sided alternative.

I am stuck. I get the value (0.078-0) /(0.201/ sqroot 76) = 3.38 but then I a not able to find this number in the table of the book because it ends at 0.005 for alfa. And anyway after I get that alfa how to go on?

I seriously need your help to get over this course. Thank you so so much. Seriously.
1. use an on-line calculator for the normal of t-distribution which ever you
are supposed to use to find the 2-sided p-value.

2. The p-value will be so small that you will reject the null hypothesis at
some appropriate level.

RonL

3. Originally Posted by CaptainBlack
1. use an on-line calculator for the normal of t-distribution which ever you
are supposed to use to find the 2-sided p-value.

2. The p-value will be so small that you will reject the null hypothesis at
some appropriate level.

RonL
After I get the value how do I know that I have to reject H_0? Shall I say let's keep H_0 if the number falls inside these 2 values and outside we reject? The p value is 0.0008 so now what and why?

4. Originally Posted by 0123
After I get the value how do I know that I have to reject H_0? Shall I say let's keep H_0 if the number falls inside these 2 values and outside we reject? The p value is 0.0008 so now what and why?
We choose a rejection level based on what we wish to use the result for.

Often the rejection level is set to 5% or 0.05. At this level we clearly reject
the null hypothesis as the p value is < 0.05.

RonL

5. Originally Posted by CaptainBlack
We choose a rejection level based on what we wish to use the result for.

Often the rejection level is set to 5% or 0.05. At this level we clearly reject
the null hypothesis as the p value is < 0.05.

RonL
How do I know that I have to considere 0.05 in this case?

So you mean 2* |P-value|> alfa we accept; inside we reject. Since 0.008 falls inside -0.025;+ 0.025 we reject?

Thank you CaptainBlack.

6. Originally Posted by 0123
How do I know that I have to considere 0.05 in this case?
You know from the context of the problem, there is nothing in the question
as set which indicates what is appropriate, so we choose 5% because
that's what everyone does when they have no idea.

So you mean 2* |P-value|> alfa we accept; inside we reject. Since 0.008 falls inside -0.025;+ 0.025 we reject?
Yes

RonL