Homework Help: Finding the P-Value for Hypothesis Testing

1. Nov 28, 2014

Kerrie

Staff Emeritus
1. The problem statement, all variables and given/known data
Suppose a mutual fund qualifies as having moderate risk if the standard deviation of its monthly rate of return is less than 6%. A mutual-fund rating agency randomly selects 28 months and determines the rate of return for a certain fund. The standard deviation of the rate of return is computed to be 5.23%. Is there sufficient evidence to conclude that the fund has moderate risk at the α=0.05 level of significance? A normal probability plot indicates that the monthly rates of return are normally distributed.

2. Relevant equations
This homework problem has multi-answers, but I am struggling to find the P-value with Hypothesis Testing when testing a claim about a standard deviation or variance. The homework question (online class) is asking to solve the P-value using technology. I have a TI-84 Plus calculator. I also have StatCrunch (the program within the online course), but not StatDisk.

3. The attempt at a solution
I have used the T-Test function in the calculator when testing the mean, but I don't have the mean in this problem to input for the T-Test. Test Statistic is X2 = 20.515 (rounded).

I understand what the P-value is for, but it seems there are various methods on the calculator to compute it. Is there anyone with knowledge of the TI-84 plus to find the P-value for testing a claim about standard deviations?

2. Nov 28, 2014

Ray Vickson

The t-distribution is never the correct one to use when testing variance. Do a search on "hypothesis test for variance".

3. Nov 28, 2014

Kerrie

Staff Emeritus
Already looked at various sites, but most of the PDF's require the mean. I'll admit that I have struggled with this statistics course, but I have usually found help by doing an online search. Hoping I can get help here as I am really stuck.

4. Nov 28, 2014

Ray Vickson

The usual test for variance does NOT need to know the mean. I cannot offer more hints until you explain in more detail what you have done already; for example: what tests have you looked at?

5. Nov 28, 2014

Kerrie

Staff Emeritus
I have looked at the Chi-Square Distribution table, but it only has a few areas that don't go below .90. My text gives very little information on calculator functions, I have very diligent notes on my calculator functions, but I cannot find the function to use. I thought the X2 test would work, but the book does not show that test as an option. I can't use the Z interval test, again it needs the mean.

6. Nov 28, 2014

Kerrie

Staff Emeritus
The invNorm also requires the mean.

7. Nov 28, 2014

Ray Vickson

I bet you can find on-line Chi-squared calculators, so using modern tools you can do much more than appears in your book.

8. Nov 28, 2014

Kerrie

Staff Emeritus
Thank you, this little bit of guidance was all I needed. Found one that will at least help with the homework.