# Hypothesis Testing and Statistical Inference

**Name: **

Directions:

· In this project you will be using the **Salary Data **file that is found in Doc Sharing under the Instructor-Graded Projects:

· Steps for accessing the **Salary Data** file:

1. Open your Excel with PhStat2

2. Click File—Open

3. Select the **Salary Data** file

· Not all questions require the use of technology or the **Salary Date** file.

· You may insert your answers, including any charts, graphs, or output, on this document.

· Be sure to put your name on this document and save it to your computer.

1. For each the following variables from the **Salary Data Set** provide the measures of location and measures of dispersion for the following variables:

**1. ****Previous Experience**

**2. ****Education**

**3. ****Which variable has the greatest relative variability?**

2. You are the manager of a high-end ladies fashion store. For the past few months you have been gathering data and found that 45% of persons entering the store actually make a purchase. Assume these data follow **a Binomial Distribution** and use **Excel** to calculate the following **binomial probabilities**:

**1. ****If 15 people enter the store, what is the probability that 9 of them will make a purchase? **

**2. ****What is the probability that at least 6 of the 15 people will make a purchase? **

3. Using the **Salary Data Set** what is the probability of randomly selecting one individual (male or female) with a **current annual salary** of over $55,000?

4. The time required to complete a project is normally distributed with a mean of 80 weeks and a standard deviation of 5 weeks. The construction company must pay a penalty if the project is not finished by the due date of the contract. If a construction company bidding on this contract wishes to be 90 percent sure of finishing by the due date, use the **NORMINV Excel Function** to determine what due date (project week #) should be negotiated?

5. In a state lottery participants select 6 numbers between 1 and 49. At the end of the week, the state lottery commission randomly draws 6 numbers between 1 and 49. How many different possible winning number **combinations** could be drawn by the lottery commission?

6. From the **Salary Data Set** and assuming that the salary data is a random sample from the population of salaries from the multi-national company use the 90% confidence level in PHStat to estimate the **mean current salary for company executives**.

**1. ****The 90% confidence level is: **

**2. ****If you were to change the confidence level to 95%, what would happen to the confidence interval?**

7. Using the **Salary Data Set**,

1. Create a **scatter plot** to show this relationship between education and beginning salary

2. Determine the **correlation** between the variables

8. Explain why rejecting the null hypothesis does not make the alternative hypothesis true.

9. What is the purpose of statistical inference?

10. What is the difference between sampling error and the standard error of the mean?

11. You are a consultant working for Kaplan Consulting. The Director of Human Resources for a multi-national company has requested help in investigating a pay discrimination complaint brought by a female executive. The company provided the data in the **Salary Data Set**. **Use PHStat** and the appropriate t test, to investigate the claim of pay discrimination in the current salaries. Be sure to include:

**1. ****Your null and alternative hypotheses;**

**2. ****The level of alpha you elect to use and why in terms of Type I or Type II error; **

**3. ****Show the output from the analysis;**

**4. ****Your interpretation of the results; and **

**5. ****A written statement to the director of Human Resources as to whether they should be concerned about the complaint. **