probability of Type II error to be no greater than 0.20 when μ = 12%?
An investment services company claims that the average annual return on stocks within a
certain industry is 10%. An investor wants to test whether this claim is true. Will a
sample size of 45 stocks in the industry of interest be a sufficiently large sample to test
H0: μ = 10% versus HA: μ ≠ 10% at the α = 0.05 level of significance if the investor
wants the β = probability of Type II error to be no greater than 0.20 when μ = 12%?
Assume that σ = 4. To get full credit for this problem, your group must present a valid
argument as justification supported by calculations.
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when the probability is 0.2:
P((β-12%)*Sqrt(n)/σ>=1.301)=20%
1.301 is the T value under degree of freedom of 44 and α =10%
I did not pay attention in leaasons of statistics, I dont know if it's correct.
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