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Business Decision Making Hypothesis Testing

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Added on  2020-02-24

Business Decision Making Hypothesis Testing

   Added on 2020-02-24

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BUSINESS DECISIONMAKINGHypothesis Testing & EstimationSTUDENT ID:[Pick the date]
Business Decision Making Hypothesis Testing_1
BUSINESS DECISION MAKINGQuestion 2Sample and Population The suburb 1 has been taken as New Town while the suburb 2 has been taken as Hurstville. Asample data of 50 samples for the weekly rent has been collected for both the suburbs(Source:https://www.realestate.com.au/buy ). The population of interest in each case wouldbe all the rented apartments which are located in the respective suburbs. From thispopulation, for the given task, 50 samples have been randomly selected. Hypothesis Testing – Rent in New TownThe objective is to determine on the basis of the collected sample as to whether the averageweekly rent in New Town is greater than $ 450 or not. Since inference about the populationhas to be drawn using sample, hence inferential statistics would be deployed.The relevant hypotheses for the given test are indicated below.Null Hypothesis (Ho): μ ≤ $450 i.e. the weekly rent of apartment in New Town is less than orequal to $ 450 Alternate Hypothesis (H1): μ > $450 i.e. the weekly rent of apartment in New Town is morethan $ 450It is apparent that the given hypothesis test would be a right tail test. Also, since the standarddeviation of the weekly rent of the population is not known, hence the appropriate teststatistic to be used would be t and not z.Sample mean = $ 661.7Sample standard deviation = $ 300.99Sample size = 50Hence, standard error = 300.99/√50 = 42.57Thus, t statistics = (661.7-450)/42.57 = 4.97Degrees of freedom = 50-1 = 49
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