We have the following sample data: .980, 1.01, .970, .990, 1.00, 1.00, .980, .970, .980, and .999. Run a sign test on H₀: M_d = 1.00 with a 2-sided alternative at α = .05. What do you conclude? A) Reject the null hypothesis; p value = .0352. B) Do not reject the null hypothesis; p value = .004. C) Reject the null hypothesis; p value = .004. D) Do not reject the null hypothesis; p value = .0352.

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Number of observations > 1.00 = 1 Number of observations < 1.00 = 7 Reject H₀ if p-value < α/2 (.025) Using binomial table find the probability that x = 1 for n = 8, p = .5 (.03125) and the probability that x = 0 for n = 8 and p = .5 (.00391). Sum of the two probabilities = .0352 > .025. Null hypothesis is not rejected.

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