SOLUTION: 4.) Nationwide, the average salary of actuaries who achieve that rank of Fellow is $150,000. An insurance executive wants to see how this compares with Fellows within his company.

Question 193134This question is from textbook Elementary Statistics
: 4.) Nationwide, the average salary of actuaries who achieve that rank of Fellow is $150,000. An insurance executive wants to see how this compares with Fellows within his company. He checks the salaries of eight Fellows and find the average salary to be $155,500 with a standard deviation of $15,000. Can he conclude that fellows in his company make more than the national average, using standar deviation=0.05?
Thanks This question is from textbook Elementary Statistics

Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Nationwide, the average salary of actuaries who achieve that rank of Fellow is $150,000. An insurance executive wants to see how this compares with Fellows within his company. He checks the salaries of eight Fellows and find the average salary to be $155,500 with a standard deviation of $15,000. Can he conclude that fellows in his company make more than the national average, using standar deviation=0.05?
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Ho: u = 150,000
Ha: u > 150,000
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test statistic: t(155,500) = (155,500-150,000)/[0.0547] = a very large number
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Comment: I doubt that you have posted the standard deviation properly.
Textbook problems do not normally yield a teststatistic in the thousands.
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Cheers,
Stan H.
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