Ten years ago 53% of American families owned stocks or stock funds. Sample data

Question

Ten years ago 53% of American families owned stocks or stock funds. Sample data collected by the Investment Company Institute indicate that the percentage is now 46%.

(a) Choose the appropriate hypotheses such that rejection of H0 will support the conclusion that a smaller proportion of American families own stocks or stock funds this year than 10 years ago. H0: p < 0.53- Select your answer -p > 0.53p 0.53p 0.53 Ha: p < 0.53- Select your answer -p > 0.53p 0.53p 0.53 (b) Assume the Investment Company Institute sampled 300 American families to estimate that the percent owning stocks or stock funds is 46% this year. What is the p value for your hypothesis test? If required, round your answer to four decimal places. (c) At = 0.01, what is your conclusion? The input in the box below will not be graded, but may be reviewed and considered by your instructor.

Explanation / Answer

a.

H: P53

H0: P> 53%

b. Assume the Investment Company Institute sampled 300 American families to estimatethat the percent owning stocks or stock funds was 46% in 2012.

c.

What is the p-value foryour hypothesis test?

Answer: n=300

The stdev is given by sqrt(p*p'/n) = sqrt(.46*(1-.46)/300) = .02877 or .0288

z= (0.46-0.53)/ 0.0288

=2.43

Stdev =sqrt(npq) = sqrt(300*.46*.54)

c. At = .01, what is your conclusion?

Answer:P=0.0075 =0.01

Reject Ho

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