Simple random samples of high-interest mortgages and low-interest mortgages were obtained. For the 14 high-interest mortgages,...

Simple random samples of high-interest mortgages and low-interest mortgages were obtained. For the 14 high-interest mortgages, the borrowers had a mean FICO score of 533 and a standard deviation of 35. For the 29 low-interest mortgages, he borrowers had a mean FICO credit score of 562 and a standard deviaiton of 36. Test the claim that the mean FICO score of borrowers with high-interest mortgages is lower than the mean FICO score of borrowers with low-interest mortgages at the .01 significance level.

Claim: Select an answer μ 1 ≥ μ 2 p 1 ≥ p 2 μ 1≠μ 2 μ 1 ≤ μ 2 μ 1 < μ 2 p 1 > p 2 p 1 < p 2 p 1 = p 2 μ 1 = μ 2 μ 1 > μ 2 p 1≠p 2 p 1 ≤ p 2  which corresponds to Select an answer H0: μ 1 ≤ μ 2 H0: p 1 ≤ p 2 H1: p 1 > p 2 H1: p 1≠p 2 H0: μ 1 = μ 2 H1: μ 1 > μ 2 H1: μ 1≠μ 2 H0: μ 1≠μ 2 H1: μ 1 < μ 2 H1: p 1 < p 2

Opposite: Select an answer μ 1 < μ 2 μ 1 ≥ μ 2 μ 1 = μ 2 μ 1 ≤ μ 2 p 1 < p 2 p 1 = p 2 p 1 > p 2 μ 1 > μ 2 μ 1≠μ 2 p 1≠p 2 p 1 ≤ p 2 p 1 ≥ p 2  which corresponds to Select an answer H1: p 1 <= p 2 H0: μ 1 ≤ μ 2 H0: p 1 > p 2 H1: μ 1 > μ 2 H0: μ 1≠μ 2 H1: p 1 = p 2 H0: μ 1 = μ 2 H1: p 1 ≥ p 2 H1: μ 1≠μ 2 H1: μ 1 < μ 2 H0: p 1≠p 2

The test is: Select an answer left-tailed two-tailed right-tailed

The test statistic is: tt = Select an answer -2.949 -2.739 -2.174 -2.522 -2.668

The critical value is: Select an answer  -2.415  -2.933  -2.826  -2.65  -2.979

Based on this we: Select an answer Accept the null hypothesis Fail to reject the null hypothesis Cannot determine anything Reject the null hypothesis

Conclusion There Select an answer does does not  appear to be enough evidence to support the claim that the mean FICO score of borrowers with high-interest mortgages is lower than the mean FICO score of borrowers with low-interest mortgages.

Expert Solution

orchestra answered 2 years ago

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