Question

According to the 14th Annual RBC Homeownership Survey conducted by Ipsos Reid in 2007, most Canadians thought purchasing a home is a good investment. Additionally, there was less concern about interest and mortgage rate hikes than at the same time the year before: 51% were concerned about interest rate increases in 2007 versus 56% in 2006; 43% thought mortgage rates would go up in 2007 versus 70% in 2006. Suppose that these results are based on 1000 randomly selected adult Canadians.

(a) (3 pts) Construct a 93% confidence interval for the proportion of Canadians who were concerned about the mortgage rate increase in 2007.

(b) (3 pts) Construct a 98% confidence interval for the difference in the proportion of Canadians who were concerned about the mortgage rate increase in two years.

(c) (7 pts) Use the p-value method to test if the proportion of Canadians who were concerned about the interest rate has decreased from 2006 to 2007 at the significant level 1%. (d) (3 pts) Interpret the p-value for the test in part (c).

Answer 1