Question

A pharmaceutical firm has developed a nasal spray containing interferon, which it believes will limit the transmission of the common cold within families. In the general population, 15.1 percent of all individuals will catch a rhinovirus- caused cold once another family member contracts such a cold. The interferon spray was tested on 180 people, one of whose family members subsequently contracted a rhinovirus-caused cold. Only 17 of the test subjects developed similar colds.
a) At a significance level of 0.05, should Farooq conclude that the new spray effectively reduces transmission of colds?
b) What should it conclude at ∞ = 0.02?
c) On the basis of these results, do you think Farooq should be allowed to market the new spray? Explain.