An Organizational Specialist Is Hired as a Consultant to a Company

question 11

Essay

An organizational specialist is hired as a consultant to a company planning to open a coffee house for college students. The company wants to know if the customers will drink more coffee if the coffee house is decorated in a Paris motif or in a San Francisco motif. To test this, the researcher sets up two similar rooms, but with the two different motifs. She then arranges to have eight students spend an afternoon in each room while being allowed to drink all the coffee they like. (The order in which they sit in the rooms is rotated, so that half do their first afternoon in the Paris room and half in the San Francisco room.)The amount each student drinks is recorded below:
Cups of Coffee Consumed for each Motif
Is there is' a significant difference between the number of cups of coffee consumed in the two rooms?
a. Use the five steps of hypothesis testing (at the .05 level of significance)
b. Figure the effect size and find the approximate power of this study

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Definitions:

Mispricing

The occurrence of an asset being priced either higher or lower than its intrinsic value due to market inefficiencies or errors in analysis.

Riskless Profits

Profits made from trading or investing that are deemed to have no risk; often considered unrealistic in practical financial markets.

Capital Asset Pricing Model

A model that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Expected Rate

The anticipated return on an investment over a certain period.