Introduction to Hypothesis Testing

Question 7 • CA-Statistics and Probability B

The P-value of this test is 0.0571. What conclusion should be made?

Answer

Because the P-value of 0.0571 < α = 0.05, we reject H0. We have convincing evidence that less than 85% of customers of this company are repeat customers.

Because the P-value of 0.0571 > α = 0.05, we fail to reject H0. We do not have convincing evidence that less than 85% of customers of this company are repeat customers.

Because the P-value of 0.0571 > α = 0.05, we fail to reject H0. We have convincing evidence that less than 85% of customers of this company are repeat customers.

Because the P-value of 0.0571 < α = 0.05, we reject H0. We do not have convincing evidence that less than 85% of customers of this company are repeat customers.

Explanation

Compare the P-value, 0.0571, with the significance level, α = 0.05. Since 0.0571 is greater than 0.05, we fail to reject the null hypothesis. The result does not provide convincing evidence that less than 85% of the company’s customers are repeat customers.

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