A manager of the credit department for an oil company would like to determine wh

Question

A manager of the credit department for an oil company would like to determine whether the mean monthly balance of credit card holders is equal to $75. An auditor selects a random sample of 100 accounts and finds that the mean owed is $83.40 with a sample standard deviation of $23.65. If you were to conduct a test to determine whether the auditor should conclude that there is evidence that the mean balance is different from $75, which test would you use?

Question 4 options:

1)

2)

3)

4)

1)

Z test of a population mean

2)

t test of a population proportion

3)

t test of population mean

4)

Z test of a population proportion

Explanation / Answer

Option 1

As we have to check the null hypothesis of mean equal to 75 and sample size is 100.

We will be using two trail Z test of a population mean

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