Cost of preferred stock. Kyle is raising funds for his company by selling preferred stock. The preferred stock has a par value
1 answer:
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Answer:
So the p value obtained was a very low value and using the significance level given we have
so we can conclude that we have enough evidence to FAIL to reject the null hypothesis, and we can said that at 5% of significance the proportion of interest is not significantly lower than 0.95, so then the program works since we fail to reject the null hypothesis.
Explanation:
Data given and notation
n=100 represent the random sample taken
X=92 represent the successful
estimated proportion of successes
is the value that we want to test
z would represent the statistic (variable of interest)
represent the p value (variable of interest)
Concepts and formulas to use
We need to conduct a hypothesis in order to test the claim that the true proportion is lower than 0.95 or no.:
Null hypothesis:
Alternative hypothesis:
When we conduct a proportion test we need to use the z statisitc, and the is given by:
(1)
The One-Sample Proportion Test is used to assess whether a population proportion is significantly different from a hypothesized value
.
Calculate the statistic
Since we have all the info required we can replace in formula (1) like this:
Statistical decision
It's important to refresh the p value method or p value approach . "This method is about determining "likely" or "unlikely" by determining the probability assuming the null hypothesis were true of observing a more extreme test statistic in the direction of the alternative hypothesis than the one observed". Or in other words is just a method to have an statistical decision to fail to reject or reject the null hypothesis.
The significance level assumed . The next step would be calculate the p value for this test.
Since is a left tailed test the p value would be:
So the p value obtained was a very low value and using the significance level given we have
so we can conclude that we have enough evidence to FAIL to reject the null hypothesis, and we can said that at 5% of significance the proportion of interest is not significantly lower than 0.95, so then the program works since we fail to reject the null hypothesis.