Here are the essential concepts you must grasp in order to answer the question correctly.
Hypothesis Testing
Hypothesis testing is a statistical method used to make decisions about a population based on sample data. It involves formulating a null hypothesis (H0) and an alternative hypothesis (H1), then using sample statistics to determine whether to reject H0 in favor of H1. In this case, the null hypothesis would state that the population standard deviation is greater than or equal to 40, while the alternative claims it is less than 40.
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Significance Level (α)
The significance level, denoted as α, is the probability of rejecting the null hypothesis when it is actually true, also known as a Type I error. In this scenario, α is set at 0.01, indicating a 1% risk of concluding that the population standard deviation is less than 40 when it is not. This level of significance helps determine the threshold for making statistical inferences based on the sample data.
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Chi-Square Test for Variance
The Chi-Square test for variance is a statistical test used to determine if the variance of a population is equal to a specified value. It is particularly useful when the population is normally distributed. In this case, the test will compare the sample variance (derived from the sample standard deviation) to the hypothesized population variance to assess whether the claim about the population standard deviation being less than 40 holds true.
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