1)Hypothesis Testing and Errors
What is a type I error? What is a type
II error? For a test at the 95% confidence level, what is alpha?
What is the power of a statistical test?
2) Sample Size
You work in the leasing office of GE
capital and wish to predict the average mileage driven of your
leased cars within a margin of error of 100 miles (you need this
for your company’s financial disclosures). Suppose your average
customer drives 10,000 miles a year, and your guess for the
standard deviation is about 500 miles. How big of a sample size do
you need to generate a 95% confidence interval with a mean of
10,000 miles a year with a margin of error of 100 miles.
