The State Association of Retired Teachers Has Recently Taken Flak $$\begin{array} { l } \mathrm { H } _ { 0 } : \mathrm { p } = 0.6 \\\mathrm { H } _ { \mathrm { A } } : \mathrm { p } > 0.6\end{array}$$

question 29

Multiple Choice

The State Association of Retired Teachers has recently taken flak from some of its members regarding the poor choice of the association's name. The association's by-laws require that more than 60 percent of the association must approve a name change. Rather than convene a meeting, it
Is first desired to use a sample to determine if meeting is necessary. Suppose the association decided to conduct a test of hypothesis using the following null and alternative hypotheses:
$$\begin{array} { l } \mathrm { H } _ { 0 } : \mathrm { p } = 0.6 \\\mathrm { H } _ { \mathrm { A } } : \mathrm { p } > 0.6\end{array}$$
Define a Type I Error in the context of this problem.

• A) They conclude that exactly \(60 \%\) of the association wants a name change when, in fact, that is not true.
• B) They conclude that exactly \(60 \%\) of the association wants a name change when that is, in fact, true.
• C) They conclude that more than \(60 \%\) of the association wants a name change when that is, in fact, true.
• D) They conclude that more than \(60 \%\) of the association wants a name change when, in fact, that is not true.

---

Definitions:

Bond Discount Account

An account that shows the difference between the face value and the lower selling price of a bond, which is amortized over the life of the bond.

Balance Sheet

A financial statement that provides a snapshot of a company's financial condition at a specific point in time, detailing assets, liabilities, and equity.

Deduction

A deduction is an expense that can be subtracted from gross income in order to reduce the amount of income that is subject to tax.

Premium On Bonds Payable

The amount by which the bond's selling price exceeds its face value, reflecting additional cost to the issuer but higher interest income for the investor.