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12. A large bank claims that approximately 14%ofall house loans it issues are in default. A...

12. A large bank claims that approximately 14%ofall house loans it issues are in default. A random sample of 243 house loans issued by this bank finds that 42 of them are in default. Do the data indicate that the proportion of loans in default exceeds 14%?

(a) State the null and alternative hypotheses for the test.

(b) State the formula for the test statistic and compute its value. Justify your answer.

(c) Construct the rejection region and make a decision. Use α = 0.05

(d) State a conclusion about the proportion of house loans in default based on the test you performed.

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Math   Statistics-And-Probability   
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