Problem 2. The Citizen Bank employs two appraisers. When approving borrowers for mortgages, it is imperative...

Problem 2. The Citizen Bank employs two appraisers. When approving borrowers for mortgages, it is imperative that the appraisers value the same types of properties consistently. To make sure that this is the case, the bank examines six properties (in $1,000) that the appraisers had valued recently.

Proprty	Appraiser 1	Appraiser 2
1	235	239
2	195	190
3	264	271
4	315	310
5	435	437
6	515	525

A. Let µD = µ1 − µ2, where µ1 is the mean value of properties from Appraiser 1, and µ2 is the mean value of properties from Appraiser 2. Specify the competing hypotheses that determine whether there is any difference between the values estimated by Appraiser 1 and Appraiser 2.

B. Assuming the value difference is normally distributed, calculate the value of the test statistic. (Please round your answer to 4 decimal places.)

C. Find the p-value in this test. (Please round your answer to 4 decimal places. You can either approximate the p-value using t-table or and the exact p-value using Excel or any software.)

D. At the 5% significance level, is there sufficient evidence to conclude that the appraisers are inconsistent in their estimates? Please explain.

E. Construct a 95% confidence interval of the mean difference between values estimated by Appraiser 1 and Appraiser 2, i.e., 95% confidence interval of µD. (Please round your answer to 4 decimal places.)

Expert Solution

orchestra answered 1 year ago

Problem 2. The Citizen Bank employs two appraisers. When approving borrowers for mortgages, it is imperative...

Problem 2. The Citizen Bank employs two appraisers. When approving borrowers for mortgages, it is imperative that the appraisers value the same types of properties consistently. To make sure that this is the case, the bank examines six properties (in $1,000) that the appraisers had valued recently. Proprty Appraiser 1 Appraiser 2 1 235 239 2 195 190 3 264 271 4 315 310 5 435 437 6 515 525 A. Let µD = µ1 − µ2, where µ1 is...

First National Bank employs three real estate appraisers whose job is to establish a property’s market...

First National Bank employs three real estate appraisers whose job is to establish a property’s market value before the bank offers a mortgage to a prospective buyer. It is imperative that each appraiser values a property with no bias. Suppose First National Bank wishes to check the consistency of the recent values that its appraisers have established. The bank asked the three appraisers to value (in $1,000s) three different types of homes: a cape, a colonial, and a ranch. The...

First National Bank employs three real estate appraisers whose job is to establish a property’s market...

First National Bank employs three real estate appraisers whose job is to establish a property’s market value before the bank offers a mortgage to a prospective buyer. It is imperative that each appraiser values a property with no bias. Suppose First National Bank wishes to check the consistency of the recent values that its appraisers have established. The bank asked the three appraisers to value (in $1,000s) three different types of homes: a cape, a colonial, and a ranch. The...

A bank faces two types of borrowers, type A and B. Both want a $225 loan....

A bank faces two types of borrowers, type A and B. Both want a $225 loan. Type A repays the loan 90% of the time and type B only repays with probability 0.76. The bank doesn't observe type, but believes fraction x is type A. What does x need to be so that the bank can afford a pooling interest rate of 27.1%? Please explain, someone else answered incorrectly .29, but the correct answer should be .19 according to my...

2. An elementary school employs 20 teachers; 12 are women and 8 are men. Two teachers...

2. An elementary school employs 20 teachers; 12 are women and 8 are men. Two teachers are selected at random to meet the governor. Is this selection done with or without replacement? a) What is the chance that both are women? b) What is the chance that at least one is a women? c) What is the chance that both are the same gender?

2. Jun Hao’s Asian Grocery store in Shenzhen has two checkouts (with registers) and employs four...

2. Jun Hao’s Asian Grocery store in Shenzhen has two checkouts (with registers) and employs four staff. They are all equally skilled and equally good at operating the checkouts (Checkers) and bagging the groceries (baggers). Jun Hao allocates one checker and one bagger to each of the two checkout lanes. A checkout lane with two staff (one checker and one bagger) can serve 40 customers per hour, while a checkout lane with only a checker can serve 25 customers per hour....

what are two reasons of when debt becomes a problem for a country?

when performing a reconciliation between the bank statement and the cash book, which TWO of the...

when performing a reconciliation between the bank statement and the cash book, which TWO of the following would require an entry in the cash book? a. Deposits credited after date b. Direct debit on bank statement only c. Bank charges d. Bank error

Question 2 (a) Elaborate on the process taken by the central bank when conducting a contractionary...

Question 2 (a) Elaborate on the process taken by the central bank when conducting a contractionary monetary policy. [15 marks] (b) Based on your answer above, select an economic problem where a contractionary monetary policy would help eradicate and explain what happens. [13 marks]

Problem 2. Hypothesis test between two coins

Question

Problem 2. The Citizen Bank employs two appraisers. When approving borrowers for mortgages, it is imperative...

Solutions

Expert Solution

Related Solutions

Problem 2. The Citizen Bank employs two appraisers. When approving borrowers for mortgages, it is imperative...

First National Bank employs three real estate appraisers whose job is to establish a property’s market...

First National Bank employs three real estate appraisers whose job is to establish a property’s market...

A bank faces two types of borrowers, type A and B. Both want a $225 loan....

2. An elementary school employs 20 teachers; 12 are women and 8 are men. Two teachers...

2. Jun Hao’s Asian Grocery store in Shenzhen has two checkouts (with registers) and employs four...

what are two reasons of when debt becomes a problem for a country?

when performing a reconciliation between the bank statement and the cash book, which TWO of the...

Question 2 (a) Elaborate on the process taken by the central bank when conducting a contractionary...

Problem 2. Hypothesis test between two coins