Question

We are interested in determining whether the variances of the sales at two music stores (A and B) are equal. A sample of 25 days of sales at store A has a sample standard deviation of 30, while a sample of 16 days of sales from store B has a sample standard deviation of 20. At 95% confidence, the null hypothesis _____.
a. should be rejected
b. should be revised
c. should not be rejected
d. None of these answers are correct.

Answer 1

Answer:

C.

Step-by-step explanation:

Hypothesis testing procedure:

Hypothesis:

The null hypothesis will be the variances of sales of two musical stores are equal and the alternative hypothesis will be the variances of sales of two musical stores are not equal

Level of significance: alpha=0.05

Test statistic: F=variance A/variance B=(30)^2/(20)^2=900/400=2.25

P-value: p=0.107

As the alternative hypothesis mentioned that the variances are not equal this leads to two tailed test. so the p-value is calculated using excel function 2*F.DIST.RT(2.25,24,15).

Conclusion:

The p-value seems to exceed the alpha=0.05 and this depicts that the null hypothesis should not be rejected.