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The marketing manager of a branch office of a local telephone operating company wants to study characteristics of residential customers served by her office. In particular, she wants to estimate the mean monthly cost of calls within the local calling region. In order to determine the sample size necessary, she needs an estimate of the standard deviation. On the basis of her past experience, she estimates that the standard deviation is equal to $12. Suppose that a small scale study of 15 residential customers indicates a sample standard deviation of $9.25. At the 0.10 level of significance, is there evidence that the population standard deviation is less than $12?
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