A National Manufacturer of Ball Bearings Is Experimenting with Two

question 79

Multiple Choice

A national manufacturer of ball bearings is experimenting with two different processes for
Producing precision ball bearings. It is important that the diameters be as close as possible to an
Industry standard. The output from each process is sampled and the average error from the industry
Standard is calculated. The results are presented below:
The researcher is interested in determining whether there is evidence that the two processes yield
Different average errors.
What is the decision at the 1% level of significance?

• A) Reject the null hypothesis and conclude the means are different.
• B) Reject the null hypothesis and conclude the means are the same.
• C) Fail to reject the null hypothesis and conclude the means are the same.
• D) Fail to reject the null hypothesis and conclude the means are different.

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Definitions:

Expected Rates of Return

The anticipated percentage gain or loss that an investment is predicted to generate over a given period of time, taking into account both known and estimated variables.

Probability Distribution

A function that represents the likelihood of various outcomes in a random experiment.

Average Portfolio Standard Deviation

A measure of the volatility of all the assets in a portfolio, calculated as the square root of the variance of the portfolio's returns.

Coefficient of Correlation

A numerical metric evaluating the magnitude and orientation of a linear correlation between two variables, with values spanning from -1 to 1.