Recently the national average yield on municipal bonds has been = 4.19%. A rando

Question

Recently the national average yield on municipal bonds has been = 4.19%. A random sample of 16 Arizona municipal bondsgave an average yield of 5.11% with a sample standard deviation s =1.15%. Does this indicate that the population mean yield forall Arizona municipal bonds is greater than the nationalaverage? Use = 0.05. Assume x is normallydistributed.

a) State the null and the alternate hypothesis.

b) Identify the sampling distribution to be used: thestandard normal distribution or the Student's t distribution. Findthe critical value(s).

c) Compute the z or t value of the sample test statistic.

d) Find the P value or an interval containing the P value forthe sample test statistic.

e) Based on your answers to a through d, decide whether or notto reject the null hypothesis at the given significancelevel. Explain your conclusion in the context of theproblem.

Explanation / Answer

a) Null hypothesis    xbar > Alternate hypthosis   xbar<= b) Student T-distribution will be used, all we know is ,xbar, standard deviation of the sample, and sample size c) t-value=3.2 d) p-value=0.00298 e) since p-value < , we accept the null hypothesis.Averages are higher

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