Question

The following data was calculated during a study on credit card debt. Using the following data, how would we interpret the results if the significance level was 1%? A business loan officer would like to test the claim that the average amount of credit card debt for a small business is greater than 3.9 thousand dollars. The test statistic is calculated as t0=1.48 The p-value is between 0.05 and 0.10. Select the correct answer below:

A, Fail to reject H0. There is NOT strong evidence to conclude that the average amount of credit card debt for a small business is greater than 3.9 thousand dollars.

B, Fail to reject H0. There is strong evidence to conclude that the average amount of credit card debt for a small business is greater than 3.9 thousand dollars.

C, Reject H0. There is NOT strong evidence to conclude that the average amount of credit card debt for a small business is greater than 3.9 thousand dollars.

D, Reject H0. There is strong evidence to conclude that the average amount of credit card debt for a small business is greater than 3.9 thousand dollars.

Answer 1

Solution:
Given in the question
the claim that the average amount of credit card debt for a small business is greater than 3.9 thousand dollars, So null and alternate hypothesis can be written as
Null hypothesis H0: = 3.9 thousand dollars
Alternate hypothesis Ha: > 3.9 thousand dollars
This is right tailed hypothesis. at alpha. = 0.01, test statistic value = 1.48, So p-value is between 0.05 and 0.10 that means p-value is greater than alpha value. So we are failed to reject the null hypothesis and we dont have significant evidence to support the claim that the average amount of credit card debt for a small business is greater than 3.9 thousand dollars.
So its correct answer is A. i.e. Fail to reject H0. There is NOT strong evidence to conclude that the average amount of credit card debt for a small business is greater than 3.9 thousand dollars.