Company

IDS 570 – Homework 8

Due Tuesday, Nov 5 1. 7.46 Executives learn Spanish. Page 448 The table below gives the pretest and posttest scores on the MLA listening test in Spanish for 20 executives who received intensive training in Spanish. The setting is identical to the one described in Example 7.7.

(a) We hope to show that the training improves listening skills. State an appropriate H0 and Ha . Describe in words the parameters that appear in your hypotheses. (b) Make a graphical check for outliers or strong skewness in the data that you will use in your statistical test, and report your conclusions on the validity of the test. (c) Carry out a test. Can you reject H0 at the 5% significance level? At the 1% significance level? (d) Give a 90% confidence interval for the mean increase in listening score due to the intensive training. 2. 7.92 Compare two marketing strategies. Page 471 A bank compares two proposals to increase the amount that its credit card customers charge on their cards. (The bank earns a percentage of the amount charged, paid by the stores that accept the card.) Proposal A offers to eliminate the annual fee for customers who charge $4000 or more during the year. Proposal B offers a small percent of the total amount charged as a cash rebate at the end of the year. The bank offers each proposal to an SRS of 150 of its existing credit card customers. At the end of the year, the total amount charged by each customer is recorded. Here are the summary statistics:

(a) Do the data show a significant difference between the mean amounts charged by customers offered the two plans? Give the null and alternative hypotheses, and calculate the two-sample t statistic. Obtain the P-value (either approximately from Table D or more accurately from software). State your practical conclusions. 1

(b) The distributions of amounts charged are skewed to the right, but outliers are prevented by the limits that the bank imposes on credit balances. Do you think that skewness...