Question

In: Statistics and Probability

Billy Bonds bought a bunch of random mortgages (84 to be exact). The average outstanding principle...

  1. Billy Bonds bought a bunch of random mortgages (84 to be exact). The average outstanding principle for these 84 mortgages is $279,433.55, with a sample standard deviation of $44,642.22. He wonders if this mean is significantly different from the mean for the mortgages Sally bought (her mean was $299,405.01).

Check all assumptions, write down the null and alternative hypotheses statements, and carry out a t-test for the mean. Be sure to state the p-value and decide whether or not to reject the null hypothesis based on the p-value. Finally, compare this result with that of the Billy Bonds confidence interval problem from the previous homework. Are the two consistent? Explain.

Solutions

Expert Solution

Hence, there is enough evidence to conclude that this mean is significantly different from the mean for the mortgages Sally bought.


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