Question

Panera has recently acquired a new branch and thus has customers in this new territory. They are interested in the default rate in their new territory. They wish to test the hypothesis that the default rate is different from their current customer base. They sample 93 files in area A, their current customers, and find that 42 have defaulted. In area B, the new customers, another sample of 90 files shows 79 have defaulted on their loans. What is the Test Statistics to test the Null Hypothesis H₀ : p_A = p_B against the alternative H_a : p_A ≠ p_B?

Answer 1

Formula for test statistics

Now we calculate pooled proportion

Now we plug the values in formula of test statistics

Final answer :-

Test statistics = -6.089440556

Note:- Some more hint to use Calculator Ti - 84 and Ti -83

You can use Ti - 84 or Ti - 84 to calculate the test statistics value

press " Stat " key

Then select "TESTS "

Select " 2 PropZ Test "

Select p₁ ≠ p₂

Then select " Calculate "

And presss " Enter "

We get the value of Z = -6.089440556 which is the test statistics value

Final answer :-

Test statistics = -6.089440556