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Designated as H0 (pronounced h-nought). • Specified as H0 = some numeric value (or ≤, ≥) The third bullet is the key one to remember when setting up your null hypothesis. The equality sign is always in the null hypothesis as it is what your belief is and what you want to test. Along with the null hypothesis, every hypothesis test also has an alternative hypothesis, denoted Ha If H0 turns out to be false, then one accepts the alternative hypothesis is true. The alternative hypothesis is defined as follows: • It is the opposite of the null hypothesis.

This is often a difficult concept to understand so it helps to work through it with an example. Say we are interested in knowing the average amount of money spent on groceries for a family of four in a month. It is not reasonable to go out to every family of four in the country and collect this data. But what I can do is select a sample of households, say 30, collect their monthly grocery bill and take the average. So I take my sample of 30 and get an average of $350. My friend also decides to perform the experiment and he goes out, collects a sample of 30 and gets a different monthly average, say $310.

2 The Normal Distribution The next distribution that we will investigate is the normal distribution. It is one of the most famous statistical distributions in use and we will use it extensively throughout the rest of this book. The normal distribution is a continuous probability distribution. Thus, it applies to random variables that are measured not counted. Several phenomenon are modeled with the normal distribution. For instance, heights of people are normally distributed as well as possible blood pressure levels for people.

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