Hypothesis Testing
4. Assume H0 is true and determine the sampling distribution of the test statistic.
5. Collect a random sample of some predetermined size, compute the test statistic and test the hypothesis.
For two-sided test, if , reject H0.
For one-sided test, if H1: E(x) > ? , reject H0 if ;
if H1: E(x) < ?, reject H0 if .