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A hard disk manufacturer advertises that the probability of its product being returned for defects during warranty period is 1%. In a sample of 2000, 26 end up being returned for defects.
a) At 5 % significance level, test the null hypothesis return rate is 1% against the alternative that the defect rate is not 1%.
b) At 5 % significance level, test the null hypothesis return rate is 1% againts the alternative that the defect rate is greater than 1%.
C) Which of the 2 test has more power?
b is more powerful, definately.
But without the Standard Deviation around 1%, none could do such a test.
X'(y-Xβ)=0
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