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You are on page 1of 3

This handout is a supporting document of our presentation which has three sections as follows,

1.

2.

3.

Testing of Hypothesis

Probability Distribution Framework

Section 1 - Terminologies in Hypothesis Testing

1)

2)

3)

a)

b)

c)

4)

5)

6)

a)

b)

c)

7)

a)

b)

c)

d)

Probability Distribution : Its a spread over like a pattern of its numeric values when the

population is subjected to sampling

Discrete Random Variable: The outcomes of Probability distribution is counted (Whole

numbers) then it is called as Discrete Random Variable

Ex: Binomial Distribution, Poisson distribution

Binomial Distribution: Binomial Distribution is applicable when it satisfies the following

condition,

Each observation is classified as success & failure, If success is p =1, then failure is q = 0

The trials must be independent of each other

The description of event should remain the same

Poisson Distribution: It is an approximation of Binomial Distribution, use poisson when the

sample size is less than 30

Continuous Random Variable: the outcomes of probability distribution is measured(decimal

values) then it is called as Continuous Random Variable

Normal Distribution: When the spread is distributed like a bell curve then it is called as

Normal Distribution it holds good under following circumstances,

Mean = Median = Mode

The distribution is symmetrical on both sides and has a probability of 0.5 on both the sides

68% of population lies within 1 SD from mean, 95.5% of population lies within 2 SD from

mean, 99.7% of population lies within 3 SD from mean

in which what holds good for the sample will also holds good for the whole population.

Null Hypothesis : If there is no significant difference between the population & the sample

size, the null hypothesis is true. If we reject the population when the null hypothesis is true then it

is called as Type I Error.

Alternative Hypothesis: There is a significant difference between the population & the sample

Size, then the alternative hypothesis is true.If we accept the population when the alternative

hypothesis is true, then it is called as Type 2 Error

Level of Significance: LOS is nothing but the Size of the Error in other words the tolerance

limit for the errors

Two Tailed Test: If we want to compare two mean how different they are then it is two tailed

test

e)

Right Hand Tailed Test: If the testing has to determine the computed value is greater than

compared to pre-determined value then it is called as Right Hand Tailed Test

f)

Left Hand Tailed Test: If the testing has to determine the computed value is lesser than

compared to pre-determined value then it is called as left Hand Tailed Test

Section 2 - Steps in Hypothesis Testing

1.

2.

3.

4.

5.

6.

Set up the alternate hypothesis

Set up the test statistic

Decide upon the level of significance and critical value using statistical tables.

Compute the value of statistic using the sample drawn from the population

Compare the computed statistics with the pre-determined statistic & come to a conclusion.

Sample Problem:

The mean life time of 100 picture tubes produced by a manufacturing company is estimated to be

5795 hours, with a standard deviation of 150 hours. Test the hypothesis that the mean life time of

picture tubes is 6000 hours at 5% level of significance.

Step 1: Determine the Type of problem and prefix the formulas

The problem is testing about a mean with two tailed test, refer Framework table and select

the suitable formula, S.No 2

Step 2: Take the data given in the question

The sample size = n = 100, The sample mean = x = 5796, The assumed mean = 0 = 6000,The

sample standard deviation == 150

Step 3: Frame the Hypothesis

H0:There is no significant difference between the sample mean and the assumed mean.

H1: There is a significant difference between the sample mean and the assumed mean.

Being a two tailed lest if we divide 5% LOS on both the sides we get 2.5% as rejection region &

47.5% as acceptance region on both the sides, at a mean value of 0.475 we get Z value as 1.96 , so

on both sides 1.96 ( Refer Standard Normal Table)

Step 5: Use the Formula from Framework Table

Let us now substitute the values in the Z equation and determine the calculated value of Z.

Since the Zcal is lesser and fall beyond acceptance region, hence we are rejecting the null

hypothesis and accepting the alternative hypothesis ( i.e,there exist is s significant difference

between the sample mean and the assumed mean)

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