Corporate advertising tries to enhance the image of the corporation. A study com

Question

Corporate advertising tries to enhance the image of the corporation. A study compared two ads from two sources, Wall Street Journal and the National Enquirer. Subjects were asked to pretend that their company was considering a major investment in Performax. the fictitious sportswear firm in the ads. Each subject was asked to respond to the question, "How trustworthy was the source in the sportswear company ad for Performax?" on a seven point scale. Higher values indicated more trustworthiness. Here is a summary of the results: (a) At the 5% significance level, is the Wall Street Journal more trustworthy on average than the National Enquirer? Be sure to include all steps of the hypothesis test. (b) Give a 95% confidence interval for the mean difference and interpret it in the context of the problem.

Explanation / Answer

(A)

Below are the null and alternate hypothesis,

p-value is approximately zero.

As p-value is less than significance level we reject null hypothesis. This means WSJ is more trustworthy than NE.

(B)

For 95% CI, t-value = 0.49

lower bound = (x1bar - x2bar) - t*SE = 2.34 - 0.49*0.28 = 2.203

upper bound = (x1bar - x2bar) + t*SE = 2.34 + 0.49*0.28 = 2.477

Given Data Sample 1 Sample 2 Name WSJ NE mean 4.77 2.43 Sample size 66 61 Std. dev. 1.50 1.64

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