Problem

The average daily volume of a computer stock in 2011 was $\mu=35.1$ million shares, according to a reliable source. A stock analyst believes that the stock volume in 2018 is different from the 2011 level. Based on a random sample of 30 trading days in 2018 , he finds the sample mean to be 28.8 million shares, with a standard deviation of $s=13.8$ million shares. Test the hypotheses by constructing a $95 \%$ confidence interval. Complete parts (a) through (c) below.
(a) State the hypotheses for the test.
\[
\begin{array}{l|l|l|l|l|l}
\mathrm{H}_{0}: & \mathbf{V} & \mathbf{V} & 35.1 \text { million shares } \\
\mathrm{H}_{1}: & \mathbf{V} & \mathbf{V} & 35.1 \text { million shares }
\end{array}
\]

Answer

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Answer

\[\boxed{\text{Reject } H_0}\]

Steps

Step 1 :State the hypotheses for the test. The null hypothesis (H0) is that the average daily volume of the stock in 2018 is the same as in 2011, which is 35.1 million shares. The alternative hypothesis (H1) is that the average daily volume of the stock in 2018 is different from 35.1 million shares.

Step 2 :\[\begin{array}{l|l|l|l|l|l} \mathrm{H}_{0}: & \mu & = & 35.1 \text { million shares } \\ \mathrm{H}_{1}: & \mu & \neq & 35.1 \text { million shares } \end{array}\]

Step 3 :Construct a 95% confidence interval for the mean of the stock volume in 2018. If the 2011 mean (35.1 million shares) falls within this interval, we fail to reject the null hypothesis. If it does not, we reject the null hypothesis in favor of the alternative.

Step 4 :The 95% confidence interval for the mean of the stock volume in 2018 is approximately (23.86, 33.74) million shares.

Step 5 :\[\text{Confidence Interval} = (23.86, 33.74) \text{ million shares}\]

Step 6 :Since the 2011 mean (35.1 million shares) does not fall within this interval, we reject the null hypothesis in favor of the alternative. The stock volume in 2018 is significantly different from the 2011 level.

Step 7 :\[\boxed{\text{Reject } H_0}\]

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