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  • What is a Z-Test Az-test is a statistical test used to determine whether two population means aredifferent when the variances are known and the sample size is large. 
  • The test statistic is assumed to have a normal distribution, and nuisance parameters such as standard deviation should be known in order for an accurate z-test to be performed.
  • The basic z score formula for a sample is:z = (x – μ) / σ
  • To select the z-test tool, click the Data tab’s Data Analysis command button.When Excel displays the Data Analysis dialog box, select the z-Test: Two Sample for Means tool and then click OK.In the Variable 1 Range and Variable 2 Range text boxes, identify the sample values by telling Excel in what worksheet ranges you’ve stored the two samples
  • Use the Hypothesized Mean Difference text box to indicate whether you hypothesize that the means are equal.Use the Variable 1 Variance (Known) and Variable 2 Variance (Known) text boxes to provide the population variance for the first and second samples.In the Alpha text box, state the confidence level for your z-test calculation.
  • In the Output Options section, indicate where the z-test tool results should be stored. Then click ok,excel automatically calculates the z-test resultsThe z-test results show the mean for each of the data sets, the variance, the number of observations, the hypothesized mean difference, the z-value, and the probability values for one-tail and two-tail tests.
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