Set up hypotheses:
The null hypotheses is that the proportion of readers who own a Rolls Royce is equal to 0.55
Null hypotheses = H₀: p = 0.55
The alternate hypotheses is that the proportion of readers who own a Rolls Royce is not equal to 0.55
Alternate hypotheses = H₁: p ≠ 0.55
Determine the type of test:
Since the alternate hypothesis states that the proportion of readers who own a Rolls Royce is different, therefore it is a two-tailed test.
Determine the level of significance and Critical Z-score:
Given level of significance = 0.05
Since it is a two-tailed test,
Z-score = 1.960 (two tailed)
Set up decision rule:
Since it is a two-tailed test, using a Z statistic at a significance level of 5%
We Reject H₀ if Z < -1.960 or Z > 1.960
We Reject H₀ if p ≤ α
Compute the test statistic:
The test statistic may be calculated using,
We are not given enough information to find out the test statistic.
Conclusion:
We do not have enough information to accept or refuse the publisher's claim.
