People borrow money to buy homes. A borrower that fails to make payments on thei

Question

People borrow money to buy homes. A borrower that fails to make payments on their loan is said to be delinquent. The proportion of borrowers who are delinquent is called the delinquency rate. Federal regulators want to use a 95% confidence interval to estimate the true difference in the delinquency rates for two types of loan: conventional home loans and home loans insured by the Federal Housing Administration. (They subtract in the order .) Based on data obtained from a random sample, their confidence interval is (0.032, 0.048). Which of the following is the best way to report this confidence interval? (Assume the requirements for this confidence interval are met.) We are 95% confident that the true delinquency rate is between 0.032 and 0.048. We are 95% confident that the data lie between between 0.032 and 0.048. We are 95% confident that the true difference in the delinquency rates is between 0.032 and 0.048. We are 95% confident that between 3.2% and 4.8% of borrowers are delinquent.

Explanation / Answer

Correct Option: We are 95% confident that the true difference in the delinquency rates is between 0.032 and 0.048.

Reason: confidence interval provide an estimtor of population parameter

Here, the parameter is true difference which is predicted at 95% confidence from the samples which are drawn from the respective populations.

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