## Related questions with answers

Commercial real estate prices and rental rates suffered substantial declines in 2008 and 2009 (Newsweek, July 27, 2009). These declines were particularly severe in Asia; annual lease rates in Tokyo, Hong Kong, and Singapore declined by 40% or more. Even with such large declines, annual lease rates in Asia were still higher than those in many cities in Europe. Annual lease rates for a sample of 30 commercial properties in Hong Kong showed a mean of $\$1,114$ per square meter with a standard deviation of $\$230$.

Annual lease rates for a sample of 40 commercial properties in Paris showed a mean lease rate of $\$989$ per square meter with a standard deviation of $\$195$.

a. On the basis of the sample results, can we conclude that the mean annual lease rate is higher in Hong Kong than in Paris? Develop appropriate null and alternative hypotheses.

b. Use $\alpha$ = .01. What is your conclusion?

Solution

Verified**(a)** We will tested following hypothese,

$\begin{aligned} H_{0}:\mu_1 \leq \mu_2\\ H_{1}: \mu_{1}>\mu_2 \end{aligned}$

$\mu_1$ is mean of the annual lease rates in Hong Kong , and $\mu_2$ ismean of the annual lease rates in Paris.

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