Question

In: Statistics and Probability

Fast Facts Financial (FFF), Inc. provides credit reports to lending institutions which are evaluating applicants for...

Fast Facts Financial (FFF), Inc. provides credit reports to lending institutions which are

evaluating applicants for home mortgages, vehicle, home equity, and other loans.

A pressure faced by FFF Inc. is that several competing credit reporting companies are

able to provide reports in about the same average amount of time, but are able to promise

a lower time than FFF Inc - the reason being that the variation in time required to

compile and summarize credit data is smaller than the time required by FFF.

FFF has identified & implemented procedures which they believe will reduce this

variation. If the historic standard deviation is 2.3 days, and the standard deviation for a

sample of 25 credit reports under the new procedures is 1.8 days, then test the appropriate

hypothesis at the alpha = .05 level of significance.

Hint: Use chi-square distribution, assume measured trait is normal, and evidence should be insufficient for rejecting null hypothesis.

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Expert Solution


orchestra answered 1 year ago
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