9.4 Exercise 4

It is believed that a stock price for a particular company will grow at a rate of $5 per week with a standard deviation of $1. An investor believes the stock won’t grow as quickly. The changes in stock price is recorded for ten weeks and are as follows: $4, $3, $2, $3, $1, $7, $2, $1, $1, $2. Perform a hypothesis test using a 5% level of significance. State the null and alternative hypotheses, state your conclusion, and identify the Type I errors.