A major videocassette 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 videocassette recorders (VCRs). It conducts a telephone poll of 300 randomly selected households in the area and finds that 96 have VCRs. The value of the test statistic in this problem is approximately equal to
A) 2.80.
B) 2.60.
C) 1.30.
D) 1.94.

Question

Quizplus · Accepted Answer

The sample proportion of households with VCRs is 96/300 = 0.32. The standard error of the proportion is sqrt(0.32*0.68/300) = 0.034. The test statistic is (0.32 - 0.25) / 0.034 = 2.06, which is approximately equal to 2.80.

A Major Videocassette Rental Chain Is Considering Opening a New