You Explain It! Stock Analyst Throwing darts at the stock pages to decide which companies to invest in could be a successful stock-picking strategy. Suppose a researcher decides to test this theory and randomly chooses 100 companies to invest in. After 1 year, 48 of the companies were considered winners; that is, they outperformed other companies. To assess whether the dart-picking strategy resulted in a majority of winners, the researcher tested H₀: p = 0.5 versus H₁: p > 0.5 and obtained a P-value of 0.2743. Explain what this P-value means and write a conclusion for the researcher.
Table of contents
- 1. Intro to Stats and Collecting Data1h 14m
- 2. Describing Data with Tables and Graphs1h 55m
- 3. Describing Data Numerically2h 5m
- 4. Probability2h 16m
- 5. Binomial Distribution & Discrete Random Variables3h 6m
- 6. Normal Distribution and Continuous Random Variables2h 11m
- 7. Sampling Distributions & Confidence Intervals: Mean3h 23m
- Sampling Distribution of the Sample Mean and Central Limit Theorem19m
- Distribution of Sample Mean - Excel23m
- Introduction to Confidence Intervals15m
- Confidence Intervals for Population Mean1h 18m
- Determining the Minimum Sample Size Required12m
- Finding Probabilities and T Critical Values - Excel28m
- Confidence Intervals for Population Means - Excel25m
- 8. Sampling Distributions & Confidence Intervals: Proportion1h 25m
- 9. Hypothesis Testing for One Sample3h 29m
- 10. Hypothesis Testing for Two Samples4h 50m
- Two Proportions1h 13m
- Two Proportions Hypothesis Test - Excel28m
- Two Means - Unknown, Unequal Variance1h 3m
- Two Means - Unknown Variances Hypothesis Test - Excel12m
- Two Means - Unknown, Equal Variance15m
- Two Means - Unknown, Equal Variances Hypothesis Test - Excel9m
- Two Means - Known Variance12m
- Two Means - Sigma Known Hypothesis Test - Excel21m
- Two Means - Matched Pairs (Dependent Samples)42m
- Matched Pairs Hypothesis Test - Excel12m
- 11. Correlation1h 24m
- 12. Regression1h 50m
- 13. Chi-Square Tests & Goodness of Fit2h 21m
- 14. ANOVA1h 57m
9. Hypothesis Testing for One Sample
Performing Hypothesis Tests: Proportions
Problem 10.R.15
Textbook Question
Sleeping Patterns of Pregnant Women A random sample of 150 pregnant women indicated that 81 napped at least twice per week. Do a majority of pregnant women nap at least twice a week? Use the α = 0.05 level of significance.
Source: National Sleep Foundation.
Verified step by step guidance1
Identify the parameter of interest: the population proportion \( p \) of pregnant women who nap at least twice per week.
Set up the null and alternative hypotheses. The null hypothesis \( H_0 \) assumes no majority, so \( p = 0.5 \). The alternative hypothesis \( H_a \) tests if the majority nap at least twice per week, so \( p > 0.5 \). Formally: \( H_0: p = 0.5 \) and \( H_a: p > 0.5 \).
Calculate the sample proportion \( \hat{p} \) using the data: \( \hat{p} = \frac{81}{150} \).
Compute the test statistic for a one-proportion z-test using the formula: \[ z = \frac{\hat{p} - p_0}{\sqrt{\frac{p_0 (1 - p_0)}{n}}} \] where \( p_0 = 0.5 \) and \( n = 150 \).
Determine the critical value from the standard normal distribution for \( \alpha = 0.05 \) in a right-tailed test, then compare the calculated \( z \)-value to this critical value to decide whether to reject \( H_0 \).
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Key Concepts
Here are the essential concepts you must grasp in order to answer the question correctly.
Hypothesis Testing
Hypothesis testing is a statistical method used to make decisions about a population parameter based on sample data. It involves formulating a null hypothesis (no effect or status quo) and an alternative hypothesis, then using sample evidence to decide whether to reject the null hypothesis at a given significance level.
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Significance Level (α)
The significance level, denoted by α, is the threshold probability for rejecting the null hypothesis. It represents the risk of making a Type I error, which is rejecting a true null hypothesis. Common values are 0.05 or 5%, meaning there is a 5% chance of incorrectly concluding an effect exists.
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Finding Binomial Probabilities Using TI-84 Example 1
Proportion Testing
Proportion testing involves assessing whether the observed sample proportion differs significantly from a hypothesized population proportion. This is often done using a z-test for proportions, comparing the sample proportion to a claimed value to determine if the difference is statistically significant.
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