Question

In a sample of 80 borrowers who borrowed less than $1,000 from an online instant lender,...

In a sample of 80 borrowers who borrowed less than $1,000 from an online instant lender, 20 repaid late while in a sample of 120 who borrowed over $1,000, 44 repaid late. Is there enough evidence to conclude that those who borrow less than $1,000 are less like likely to repay late? Test at  α =0.025. α =0.025.

Standard Normal Distribution Table

a. Calculate the test statistic. Let p1p1 be the proportion for borrowers who borrowed less than $1,000 and p2p2 be those who borrowed over $1,000.

z=z=

Round to two decimal places if necessary

Enter 0 if normal approximation cannot be used

b. Determine the critical value(s) for the hypothesis test.

  • +

Round to two decimal places if necessary

Enter 0 if normal approximation cannot be used

c. Conclude whether to reject the null hypothesis or not based on the test statistic.

Reject

Fail to Reject

Cannot Use Normal Approximation

Homework Answers

Answer #1

(a)

(b)

(c) By decision rule,

Fail to Reject H0.

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