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# Testing of Hypothesis & Mean for Uniform Distribution

1. Ophelia O'Brien, VP of Consumer Credit of American First Banks (AFB), monitors the default rate on personal loans at the AFB member banks. One of her standard's is "no more than 5% of personal loans should be in default." On each Friday, the default rate is calculated for a sample of 500 personal loans. Last Friday's sample contained 38 defaulted loans. Using alpha = 0.10, the appropriate decision is _______.

a) do not reject the null hypothesis
b) reject the null hypothesis
c) reduce the sample size
d) increase the sample size

2. If x is uniformly distributed over the interval 20 to 30, inclusively (20 x 30), then the mean of this distribution is __________________.
a) 25
b) 5
c) 10
d) 50

#### Solution Preview

1. Ophelia O'Brien, VP of Consumer Credit of American First Banks (AFB), monitors the default rate on personal loans at the AFB member banks. One of her standard's is "no more than 5% of personal loans should be in default." On each Friday, the default rate is calculated for a sample of 500 personal loans. Last Friday's sample contained 38 defaulted loans. Using alpha = 0.10, the appropriate decision is _______.

a) do not reject the null ...

#### Solution Summary

This solution provides calculations and answers to the multiple choice questions on testing the hypothesis and mean for a uniform distribution.

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