Please give clear solution to each problem that is shown on the picture. Thank y
ID: 3234049 • Letter: P
Question
Please give clear solution to each problem that is shown on the picture. Thank youindustrial firms often employ "risk transfer," such as insurance or indemnity clauses in contracts, as a technique of risk management. An article reports the results of a survey in which managers were asked which methods played a major role in the firms In a 43 companies, risk management strategy of their of indicated that transfer played sample 90 construction com 55 reported that risk transfer played a major role. figures were read transfer is less Can we conclude that the proportion of oil companies that employ the method of risk from a graph.) than the proportion of construction companies that do? 10. Suppose testing Ho: p 2.7 verses p
Explanation / Answer
Solution:-
State the hypotheses. The first step is to state the null hypothesis and an alternative hypothesis.
Null hypothesis: POil> PConstruction
Alternative hypothesis: POil < PConstruction
Note that these hypotheses constitute a one-tailed test.
Formulate an analysis plan. For this analysis, the significance level is 0.05. The test method is a two-proportion z-test.
Analyze sample data. Using sample data, we calculate the pooled sample proportion (p) and the standard error (SE). Using those measures, we compute the z-score test statistic (z).
p = (p1 * n1 + p2 * n2) / (n1 + n2)
p = 0.5789
SE = sqrt{ p * ( 1 - p ) * [ (1/n1) + (1/n2) ] }
SE = 0.0915
z = (p1 - p2) / SE
z = -1.09
where p1 is the sample proportion in sample 1, where p2 is the sample proportion in sample 2, n1 is the size of sample 1, and n2 is the size of sample 2.
Since we have a one-tailed test, the P-value is the probability that the z-score is less than - 1.09. We use the Normal Distribution Calculator to find P(z < - 1.09) = 0.138
Interpret results. Since the P-value (0.138) is greater than the significance level (0.01), we cannot reject the null hypothesis.
From the above test we do not have sufficient evidence in the favor of the claim that the proportion for oil companies is less than cponstruction company.