Exercise 9-48 Static (Round all intermediate calculations to at least 4 decimal

Question

Exercise 9-48 Static

(Round all intermediate calculations to at least 4 decimal places.)

A mortgage specialist would like to analyze the average mortgage rates for Atlanta, Georgia. He studies the following sample APR quotes. These are the annual percentage rates (APR) for 30-year fixed loans. If he is willing to assume that these rates are randomly drawn from a normally distributed population, can he conclude that the mean mortgage rate for the population exceeds 4.2%? Test the hypothesis at a 10% level of significance. Use Table 2.

Calculate the value of the test statistic. (Round your answer to 2 decimal places.)

Calculate the critical value. (Round your answer to 3 decimal places.)

rev: 11_05_2015_QC_CS-31836, 11_11_2016_QC_CS-69601

(Round all intermediate calculations to at least 4 decimal places.)

A mortgage specialist would like to analyze the average mortgage rates for Atlanta, Georgia. He studies the following sample APR quotes. These are the annual percentage rates (APR) for 30-year fixed loans. If he is willing to assume that these rates are randomly drawn from a normally distributed population, can he conclude that the mean mortgage rate for the population exceeds 4.2%? Test the hypothesis at a 10% level of significance. Use Table 2.

Explanation / Answer

The statistical software output for this problem is:

One sample T hypothesis test:
: Mean of variable
H0 : = 4.2
HA : > 4.2

Hypothesis test results:

a - 1) Hypotheses: H0: µ 4.2; HA: µ > 4.2

Option B is correct.

a - 2) Test statistic = 2.27

a - 3) 0.025 p-value < 0.05; Option C

a - 4) Reject H0 since the p-value is smaller than . Option B

b - 1) Critical value = 1.440

b - 2) The mean mortgage rate for the population exceeds 4.2%. Option C

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