The printout below refers to the weekly closing stock prices for Air Canada on 20 randomly selected weeks in 2000. Using a 5% level of significance, can you say that the average Air Canada stock price was less than $19.00?

A) Fail to reject the null hypothesis and conclude the mean stock price was $19.00.
B) Since the P-value is less than the selected alpha, reject the null hypothesis and conclude the mean stock price was lower than $19.00.
C) Since the P-value is more than the selected alpha, reject the null hypothesis and conclude the mean stock price was more than $19.00.
D) Since the P-value is less than the selected alpha, reject the null hypothesis and conclude the mean stock price was different from $19.00.
E) Since the confidence interval doesn't contain the value $19.00, reject the null hypothesis and conclude that the mean stock price is different from $19.00.

Question

The printout below refers to the weekly closing stock prices for Air Canada on 20 randomly selected weeks in 2000. Using a 5% level of significance, can you say that the average Air Canada stock price was less than $19.00?

A) Fail to reject the null hypothesis and conclude the mean stock price was $19.00. 
B) Since the P-value is less than the selected alpha, reject the null hypothesis and conclude the mean stock price was lower than $19.00. 
C) Since the P-value is more than the selected alpha, reject the null hypothesis and conclude the mean stock price was more than $19.00. 
D) Since the P-value is less than the selected alpha, reject the null hypothesis and conclude the mean stock price was different from $19.00. 
E) Since the confidence interval doesn't contain the value $19.00, reject the null hypothesis and conclude that the mean stock price is different from $19.00.

Quizplus · Accepted Answer

We need to perform a one-sample t-test to determine if the sample mean is significantly less than $19.00. Using a 5% level of significance, we compare the calculated t-value (-2.245) to the critical t-value from the t-distribution table with 19 degrees of freedom (t0.025,19 = -2.093). Since the calculated t-value is less than the critical t-value and the P-value (0.019) is less than the selected alpha (0.05), we reject the null hypothesis and conclude the mean stock price was lower than $19.00.

The Printout Below Refers to the Weekly Closing Stock Prices