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A Knowledge about Hypothesis Test

A consumer watchdog organization wants to see whether Bank N in the northern part of a state has a higher default rate than Bank S in the southern part of that same state. Researchers for the group sample the proportion of defaults on loans at both banks. Out of 100 loans for Bank N, they find 30 have defaulted; out of 100 loans for Bank S, they find 20 have defaulted. Complete the hypothesis test by using a 5% level for risk with a directional research hypothesis.

(a) (1) H0:

(b) (1) H1:

(c) (1) Critical Value: t =

(d) (4) Test Statistic (Show procedure.): t =

(e) (1) Decision on H0:

(f) (2) Conclusion on the problem:

Solution Preview

A consumer watchdog organization wants to see whether Bank N in the northern part of a state has a higher default rate than Bank S in the southern part of that same state. Researchers for the group sample the proportion of defaults on loans at both banks. Out of 100 loans for Bank N, they find 30 have defaulted; out of 100 loans for Bank S, they find 20 have defaulted. Complete the hypothesis test by using a 5% level for risk with a directional research hypothesis.

This is a large sample two-tailed test ...

Solution Summary

A knowledge about hypothesis tests are examined. A hypothesis test is completed by using a 5% level for risk with a directional research hypothesis.

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