Questions 23 and 29: Use the following information to answer each question. A recent book noted that only 20% of all investment managers outperform the Dow Jones Industrial Average over a five-year period. A random sample of 200 investment managers that had graduated from one of the top ten business programs in the country were followed over a five-year period. Fifty of these outperformed the Dow Jones Industrial Average. Let p be the true proportion of investment managers who graduated from one of the top ten business programs who outperformed the Dow Jones over a five-year period. 23. Based on the results of the sample, a 95% confidence interval for p is:
a. (1.95, 3.15)
b. (0.0195, 0 .0315)
c. (0.190, 0.310)
d. (0.028, 0.031)
e. (0.195, 0.315)
f. We can assert that p = 0.20 with 100% confidence, because only 20% of investment managers outperform the standard indexes.
24. Suppose you had been in charge of designing the study. What sample size would be needed to construct a margin of error of 2% with 95% confidence? Use the prior estimate of pâ=0.2 for this estimate.
a. n=2401
b. n=1537
c. n=16
d. n=1801
e. n>30
Suppose you wish to see if there is evidence that graduates of one of the top ten business programs performs better than other investment managers. Conduct a hypothesis test. Use a level of significance of α=0.05
25. Which of the following pairs of hypotheses is the most appropriate for addressing this question?
a. H0: p=0.2
Ha: p<0.2
b. H0: p=0.2
Ha: pâ 0.2
c. H0: p=0.2
Ha: p>0.2
d. H0: p<0.2
Ha: p=0.2
e. H0: pâ 0.2
Ha: p=0.2
f. H0: p>0.2
Ha: p=0.2
26. How many measurements must you have in order to assure that p^ is normally distributed?
a. nâ¥30
b. nâ¥5
c. npâ¥10 and n(1âp)â¥10
d. npâ¥5 and n(1âp)â¥5
27. The value of your test statistic is:
a. 1.768
b. 0.039
c. 1.923
d. 0.077
28. The P-value of your test is:
a. 1.768
b. 0.039
c. 1.923
d. 0.077
29. Is there sufficient evidence to conclude that graduates from the top ten business programs perform better than other investment managers?
a. Yes. I rejected H0
b. Yes. I failed to reject H0
c. Yes. I accepted Ha
d. No. I rejected H0
e. No. I failed to reject H0
f. No. I failed to accept Ha