Question
In: Statistics and Probability
A Fair Isaac Corporation (FICO) score is used by credit agencies (such as mortgage companies and...
A Fair Isaac Corporation (FICO) score is used by credit agencies (such as mortgage companies and banks) to assess the creditworthiness of individuals. Values range from 300 to 850, with a FICO score over 700 considered to be a quality credit risk. According to Fair Isaac Corporation, the mean FICO score is 703.5. A credit analyst wondered whether high-income individuals (incomes in excess of $100,000 per year) had higher credit scores. He obtained a random sample of 40 high-income individuals and found the sample mean credit score to be 714.2 with a standard deviation of 83.2. Conduct a Classical Approach hypothesis test to determine if high-income individuals have higher FICO scores at the alpha=0.05 level of significance.
Solutions
orchestra answered 2 years agoRelated Solutions
A Fair Isaac Corporation (FICO) score is used by credit agencies such as banks to determine...
A Fair Isaac Corporation (FICO) score is used by credit
agencies such as banks to determine whether to lend money and the
interest rate to charge. Its value ranges from 300 to 850 and if
you have a score over 700, you are considered to be a "quality"
credit risk. The mean credit score of average income earners in
California is estimated by Fair Isaac to be 664. A recent survey of
47 high income earners in California had a...
A credit score is used by credit agencies ( such as mortgage companies and banks) to...
A credit score is used by credit agencies ( such as mortgage
companies and banks) to assess the credit worthiness of
individuals. Values range from 300 to 850, with a credit score over
700 considered to be a quality credit risk. According to a survey,
the mean credit score is 707.8 A credit analyst wondered whether
high income individuals (incomes in excess of $100,000 per year)
had higher credit scores. He obtained a random sample of 41 high
income individuals...
A credit score is used by credit agencies (such as mortgage companies and banks) to assess...
A credit score is used by credit agencies (such as mortgage
companies and banks) to assess the creditworthiness of
individuals. Values range from 300 to 850, with a credit score
over 700 considered to be a quality credit risk. According to a
survey, the mean credit score is 700.9. A credit analyst wondered
whether high-income individuals (incomes in excess of $100,000
per year) had higher credit scores. He obtained a random sample of
41 high-income individuals and found the sample...
A credit score is used by credit agencies (such as mortgage companies and banks) to assess...
A credit score is used by credit agencies (such as mortgage
companies and banks) to assess the creditworthiness of
individuals. Values range from 300 to 850, with a credit score
over 700 considered to be a quality credit risk. According to a
survey, the mean credit score is 706.2. A credit analyst wondered
whether high-income individuals (incomes in excess of $100,000
per year) had higher credit scores. He obtained a random sample of
42 high-income individuals and found the sample...
A credit score is used by credit agencies (such as mortgage companies and banks) to assess...
A credit score is used by credit agencies (such as mortgage
companies and banks) to assess the creditworthiness of
individuals. Values range from 300 to 850, with a credit score
over 700 considered to be a quality credit risk. According to a
survey, the mean credit score is 705.9. A credit analyst wondered
whether high-income individuals (incomes in excess of $100,000
per year) had higher credit scores. He obtained a random sample of
39 high-income individuals and found the sample...
Lenders primarily use the Fair Isaac Corporation (FICO) model to determine credit scores. FICO grades consumers...
Lenders primarily use the Fair Isaac
Corporation (FICO) model to determine credit scores. FICO grades
consumers on a 300- to 850-point range; a higher score indicates
less risk to the
lender. A score of 800 or higher is
considered exceptional; 740 to 799 is very good; 670 to 739 is
good; 580 to 669 is fair; and 579 or lower is poor.
According to
MyFICO.com your credit score can impact interest rates available to
you as follows:
FICO score
APR...
The following data lists age (x, in years) and FICO credit score (y) for 15 random...
The following data lists age (x, in years) and FICO credit score
(y) for 15 random credit card customers. At the 10% significance
level, use Excel to test the claim that age and credit score are
linearly related by specifying the slope estimate, p-value and
final conclusion below. Do not round any intermediate calculations.
Round your slope estimate answer to 2 decimal places. Round your
p-value to 4 decimal places. Enter a "−" sign in front of any
negative answer....
Problem 30-3 Z-Score Fair-to-Midland Manufacturing, Inc., (FMM) has applied for a loan at True Credit Bank....
Problem 30-3 Z-Score Fair-to-Midland Manufacturing, Inc., (FMM)
has applied for a loan at True Credit Bank. Jon Fulkerson, the
credit analyst at the bank, has gathered the following information
from the company’s financial statements: Total assets $115,000 EBIT
8,900 Net working capital 5,400 Book value of equity 39,000
Accumulated retained earnings 18,800 Sales 112,000 The stock price
of FMM is $41 per share and there are 7,000 shares outstanding.
What is the Z-score for this company? (Do not round intermediate...
Describe how the credit crisis may have adversely affected many people beyond homeowners and mortgage companies....
Describe how the credit crisis may have adversely affected many
people beyond homeowners and mortgage companies. Do you believe the
impact of the credit crisis is still being felt today? Why or why
not?
Werton Corporation has developed a new processor that would be used by many specialty companies. It...
Werton Corporation has developed a new processor that
would be used by many specialty companies. It would cost $29
million at Year 0 to buy the equipment necessary to manufacture the
facility. The project would require net working capital in Year 0
of 5,500,000 and then 5 percent of revenue in each of the
operational years to follow (Year1 to Year 4). The processor would
sell for $83,000 per unit, and Werton believes that variable costs
would amount to $61,500...
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