A major DVD rental chain is considering opening a new store in an area that currently does not have any such stores. The chain will open if there is evidence that more than 5,000 of the 20,000 households in the area are equipped with DVD players. It conducts a telephone poll of 300 randomly selected households in the area and finds that 96 have DVD players. The value of the test statistic in this problem is approximately equal to
A) 2.80.
B) 2.60.
C) 1.94.
D) 1.30.

Question

Quizplus · Accepted Answer

The correct answer is A.The test statistic is calculated as (p - 0.5) / sqrt(0.5 * 0.5 / n), where p is the sample proportion and n is the sample size. In this case, p = 96 / 300 = 0.32 and n = 300, so the test statistic is (0.32 - 0.5) / sqrt(0.5 * 0.5 / 300) = 2.80.

A Major DVD Rental Chain Is Considering Opening a New