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Test doc Stochastic Modelling Assignment 1 (17th March 2019)

1. The proportion of adults living in a small town who are college graduates is estimated to be 0.3 (= π). To test this hypothesis a random sample of 15 adults is selected. If the number of college graduates in the sample is anywhere from 2 to 7, the null hypothesis π = 0.3 is accepted; otherwise it is concluded that π ≠ 0.3. Evaluate size of type I error. Also calculate probability of type II error for the alternatives π = 0.2 and π = 0.4.

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