Question
The volatility of world crude oil prices is important because of its impact on global economic stability. One measure of volatility is the standard deviation. The accompanying data table lists the monthly price of crude oil from January 2016 to April 2018. Between 1966 and 2016 the standard deviation of crude oil prices was $30 a barrel. Check if the standard deviation of crude oil prices has decreased since 2016. Complete parts a and b. Click the icon to view the data for crude oil prices. a. Using 0.05, determine if the standard deviation of the crude oil price has decreased below a standard deviation of 30. First identify the null and alternative hypotheses. Ho: 0² H₂ (Type integers or decimals. Do not round.) Calculate the appropriate test statistic (Round to two decimal places as needed.) Calculate the critical value.. (Round to two decimal places as needed.) Use the test statistic and critical value to determine the conclusion The test statistic is the critical value so evidence to conclude that the variability in monthly crude oil prices since 2016 decreased below a standard deviation of $30 Curr Com Ho There is b. Interpret the p-value. The p-value is (Round to three decimal places as needed.) 0.05. Ho. There is decreased below a standard deviation of $30, Curr Com The p-value is the probability of This the given sample. Since the p-value is evidence to conclude that the variability in monthly crude oil prices since 2016 attempts use of its impact on global economic stability. One measure of volatility is the standard o data table lists the monthly price of crude oil from January 2016 to April 2018. Between 1986 and 2016 the standard deviation o Check if the standard deviation of crude oil prices has decreased since 2016. Complete parts a and b. icon to view the data for crude oil prices. – X Crude Oil Prices appropriate test s wo decimal places a 44.63 31.68 45.28 52.96 30.36 37.38 41.58 44.98 50.28 48.72 51.13 48.43 51.83 57.39 57,81 63.33 47.46 48.27 45.92 52.53 52.69 44.68 46.66 47.75 63.03 the critical value. 49.96 62.15 65.71 (Round to two decim test statistic and critical t statistic is Print Done 2016 decrease erpret the p-value. D monthly cri
Answer
rom the given data
a)
i)
ii) Test Statistic
Answer: 2.20
iii) Chi-square critical value = 16.151 at 5% signifiance and df = 28-1 = 27 from chi-square tables
Answer: 16.15
iv)
The test statistic is less than the critical value so we reject H0.
There is sufficient evidence to conclude that the variability of monthly crude oil prices since 2016 has decreased below an SD of $30
b) P-Value: 0.0000
Since P-value < alpha 0.05 so we reject H0
The p-value is the probability of accepting the null hypothesis from the given sample. since the p-value is less than alpha = 0.05 so we reject H0. There is sufficient evidence to conclude that the variability of monthly crude oil prices since 2016 has decreased below an SD of $30
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