Question

determine the most appropriate hypothesis test to use for the following scenario: the august 2008 edition of academy of management journal featured an investigation of the performance and tiing of corporate acquisitions. the investigations discovered that in random sample of 2778 firms, 748 annouced one or more acquisitions during the year 2000. does the sample provide suffcient evidence to indicate that the true percentage of all firms that announced one or more acquisitions during the year 2000 is less than 30%

Answer 1

Since the calculated z =-3.5357 falls in the critical region z ≥ 1.645 we reject H0 and conclude that the sample provides sufficient evidence to indicate that the true percentage of all firms that announced one or more acquisitions during the year 2000 is ≥ 30%

Explanation:

Testing hypothesis about a population proportion when sample size is large.

If the sample size is large then the variable

z= p^-p / sqrt [pq/n]

is approximately standard normal.

Formulate the hypotheses as

H0 : p < 30% against the claim Ha: p ≥ 30%

Choose the significance level ∝= 0.05

the critical region is z ≥ 1.645 because the alternative hypothesis is stated on a greater than or equal to basis.

Computing

Z= 748-(2778*0.3)/ √2778*30/100*70/100

z= 748-833.4/√583.38

z= -85.4/24.153

z=-3.5357

Since the calculated z =-3.5357 falls in the critical region z ≥ 1.645 we reject H0 and conclude that the sample provides sufficient evidence to indicate that the true percentage of all firms that announced one or more acquisitions during the year 2000 is ≥ 30%

The p- value is 0.0002