Commercial real estate prices and rental rates suffered substantial declines in the past year (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 in many cities in Europe and the United States. Annual lease rates for a sample of 30 commercial properties in Hong Kong showed an average of $1114 per square meter with a standard deviation of $230. Annual lease rates for a sample of 40 commercial properties in Paris showed an average lease rate of $989 per square meter with a standard deviation of $195.

1. 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.