A credit score is used by credit agencies (such as mortgage companies and banks) to assess the creditworthiness of individuals. Values range from 300 to 850, with a credit score over 700 considered to be a quality credit risk. According to asurvey, the mean credit score is 701.2. A credit analyst wondered whether high-income individuals (incomes in excess of $100,000 per year) had higher credit scores. He obtained a random sample of 43 high-income individuals and found the sample mean credit score to be 715.8 with a standard deviation of 83.4.
Conduct the appropriate test to determine if high-income individuals have higher credit scores at the α = 0.05 level of significance.
State the null and alternative hypotheses.
Upper H0: μ (<,=,≠,>) and _.
Upper H1: μ (<,=,≠,>) and _.
(Type integers or decimals. Do not round.)
Identify the t-statistic.
t0 = _.
(Round to two decimal places as needed.)
Identify the P-value.
P-value = _
(Round to three decimal places as needed.)
Make a conclusion regarding the hypothesis.
("Fail to reject" or "reject") the null hypothesis. There (is, or is not) sufficient evidence to claim that the mean credit score of high-income individuals is
(greater than, less than, equal to) _.
As the p value = 0.128 > 0.05 = level of significance, we do not reject Ho and conclude that the mean credit score for high income individuals is not significantly greater than 701.2
Get Answers For Free
Most questions answered within 1 hours.