10 x (.20x.80)^(1/2) = 10 x .16^(1/2)

= 10 x .4

= 4

This is the SE of the number of defectives in the sample. The SE of the percentage of defectives is

4/100 x 100% = 4% So

(observed - expected)/SE = (23-20)/4 = 3/4 = .75 .

The observed level of significance is the area under the normal curve to the right of .75. From the table, we compute this area to be about 22.5% percent. Of the choices, 25% is the closest.