标题: Confidence Intervals in Hypothesis Testing [打印本页] 作者: RealEstate_CFA 时间: 2011-7-13 15:18 标题: Confidence Intervals in Hypothesis Testing
Looking over two problems here in the Hypothesis Testing reading in Schweser and I'm seeing them determine whether or not to reject the null two different ways. In the first example they take the test statistic and multiply it by by the confidence interval (+ and - 1.96) to determine the range which then they use to decide whether to reject or not.
In example 2, they simply calculate the z statistic (essentially what is first done in example 1) and then decide to reject it if that value itself is between + or - 1.96. Can someone help explain why or what the logic is here? See below
Example 1:
Research has gathered data on daily returns of portfolio of call options over a 250 day period. The mean daily return has been .1% and the sample standard deviation of the daily portfolio returns is .25%. The researcher believes the mean daily portfolio return is not equal to 0. Construct a 95% confidence interval for the population mean daily return of the 250-day sample period. Use a z-distribution. Decide if the hypothesis should be rejected.
Ho: u is equal to 0 vs Ha: u is not equal to zero.
Solution:
.25/squareroot of 250 = .0158% standard error
.1 - 1.96(.0158) < u < .1 + 1.96(.0158) = .069% < u < .1310
answer: Reject hypothesis
Example 2:
When a company's gizmo machine is working properly,the mean length of gizmos is 2.5 inches. From time to to time the machine gets out of alignment and produces gizmos that are either too long or too short. To check the machine, quality control takes a gizmo sample each day. Today a random sample of 49 gizmos showed a mean lengh of 2.49 inches. The population standard deviation is known to be .021 inches. Using a 5% significance level determine if the machine should be shut down or adjusted.
