A large banking corporation believes that 80% of the loan applications it receives are approved within 24 hours. It decides to take a random sample of 10 loan applications every day for 3 months and record the number of the applications that are approved within 24 hours. The following data are obtained:
Number of Loan Applications in 10 Approved in 24 Hours Frequency
c). A the 0.05 level of significance, is it reasonable to assume that the number of loan applications that are approved in 24 hours has a binomial distribution with p= 0.80.
We use chi square goodness of fit test to test whether the data come from a binomial distribution.