Question

The Fair Isaac Corporation (FICO) credit score is used by banks and other lenders to determine whether someone is a good credit risk. Scores range from 300 to 850, with a score of 720 or more indicating that a person is a very good credit risk. An economist wants to determine whether the mean FICO score is lower than the cutoff of 720. She finds that a random sample of 60 people had a mean FICO score of 695 with a standard deviation of 65. Can the economist conclude that the mean FICO score is less than 720? Use the α=0.05 level of significance and the P-value method with the TI-84 Plus calculator.

a. state null and alternative hypothesis. what tail is the hypothesis test?

b. Compute the P-value of the test statistic.

c. Determine whether to reject H0. Use the α=0.05 level of significance.

d. State a conclusion

Answer 1