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How would you help the bank determine which option would provide the best incentive to customers?

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A bank has decided to offer two incentive plans to credit card customers:
A. Cash back when the consumer makes an online purchase
B. Cash back when the consumer makes a purchase at a clothing store.

The bank doesn't know whether consumers would shop online more than at clothing stores. Information Experts have placed you in a group to develop null and alternative hypotheses to help the bank determine which option would provide the best incentive to consumers. Write a brief memo to the bank product development team describing your hypotheses and explaining how you arrived at them.

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Solution Summary

This solution offers a step by step response outlining how to complete a hypothesis test in order to compare the two incentives being offered by the bank and select the better option. A Word file is also attached, which includes the one and two-tailed tests associated with this response and a distribution graph.

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Clearly this is the case of performing hypothesis tests about the difference between two population means. There are two incentive plans to credit card customers:
(i) cash back for an online purchase, and
(ii) cash back ...

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