Question

Paul wants to compare whether the prices of tangerines in two supermarkets differ significantly. He has been noting down the daily prices for the last few days and has found the difference in the sample means to be 20 cents. If the standard deviation of the distribution of the difference between sample means is 28 cents and we are testing the null hypothesis at the 95% confidence level, which statement is true?

Answer 1

Based on the rules of statistics

 68% of the data falls within 1 standard deviation of the mean

95% of the data falls within 2 standard deviation of the mean

99% of the data falls within 3 standard deviation of the mean

 20 falls between the range of -56 to 56 (from the given 95%)

Hence we accept the null hypothesis; else, if the mean falls outside the range, we reject the null hypothesis.