Answer: The level of Significance is 0.01
Step-by-step explanation: As mentioned in the question that α = 0.01 which implies the significance level. This relates with 99% confidence level.
The significance level tells you the probability of rejecting a null hypothesis by the test when it is really true.
So, in this question the hypothesis would be:
H o : u ≤ 1.75
H α : u > 1.75
If we run the test we could conclude whether or not to reject the null hypothesis. Hence, we use the following formula (since population standard deviation is unknown) :
t n − 1 = × − u /s /√n
t 41 - 1 = 2.09 - 1.75 / 0.88 / √41
t 40 = 2.473
the value of t statistics = 2.473
t40 > 2.473
Hence, we reject the null hypothesis.