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To Plan the Budget for Next Year a College Needs 35%35 \%

Question 17

Multiple Choice

To plan the budget for next year a college needs to estimate what impact the current economic downturn might have on student requests for financial aid. Historically this college has provided aid to 35%35 \% of its students. Officials look at a random sample of this year's applications to see what proportion indicate a need for financial aid. Based on these data they create a 90%90 \% confidence interval of (32%,40%) ( 32 \% , 40 \% ) . Could this confidence interval be used to test the hypothesis H0:p=0.35\mathrm { H } _ { 0 } : p = 0.35 versus HA:p0.35\mathrm { H } _ { \mathrm { A } } : p \neq 0.35 at the α=0.10\alpha = 0.10 level of significance?


A) No, because they only used a sample of the applicants instead of all of them.
B) No, because financial aid amounts may not be normally distributed.
C) Yes; since 35% is in the confidence interval they accept the null hypothesis, concluding that the percentage of students requiring financial aid will stay the same.
D) Yes; since 35% is in the confidence interval they fail to reject the null hypothesis, concluding that there is not strong evidence of any change in financial aid requests.
E) Yes; since 35% is not at the center of the confidence interval they reject the null hypothesis, concluding that the percentage of students requiring aid will increase.

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