CFA Practice Question

There are 434 practice questions for this study session.

CFA Practice Question

The Santa Rosa Homeowners are trying to prove that the homes in their area are less than 5 miles from the nearest fire station. The data and hypothesis test is shown. The conclusion should be ______.

A. There is no evidence that the homes in the Santa Rosa area are, on average, 5 miles or more from the nearest fire station.
B. The homes in the Santa Rosa area are, on average, less than 5 miles from the nearest fire station.
C. There is no evidence that the homes in the Santa Rosa area are, on average, less than 5 miles from the nearest fire station.
Explanation: Failing to reject H0 (μ ≥ 5) means that there is no evidence that μ < 5 is true. So, in terms of this example, our conclusion is that there is no evidence that the homes in the Santa Rosa area are, on average, less than 5 miles from the nearest fire station.

User Contributed Comments 6

User Comment
miso Why B is wrong In similar qestion conclusion was stricty related to H0 such populattion is less than 0.32
NufaNka Because we fail to reject Ho, we dont reject or accept it.
achu Remember, Ha is what you WANT to prove. So conclusions are about Ha not H0.
discoarzt @achu: but Ha says smaller than 5 and the result is 4,9 on average. So I don´t really understand the answer, can you please explain it in more detail? thx
Marinov The test value -0.71 is not beyond the rejection point -1.65. So we cannot reject the null hypothesis.
GBolt93 sample average is 4.9, but that doesn't mean it's a statistically significant difference. Based on 95% confidence you can't conclude that the population mean is less than 5.
You need to log in first to add your comment.