H 0 : = 5, H a : > 5 at significance level = 0.01. You conclude that: Suppose th

Question

H0: = 5, Ha: > 5

at significance level = 0.01. You conclude that:

Suppose the time that it takes a certain large bank to approve a home loan is Normally distributed with mean (in days) and standard deviation = 1. The bank advertises that it approve loans in 5 days, on average, but measurements on a random sample of 500 loan applications to this bank gave a mean approval time of = 5.3 days. Is this evidence that the mean time to approval is actually longer than advertised? To answer this, test the hypotheses

H0: = 5, Ha: > 5

at significance level = 0.01. You conclude that:

Ha should be rejected. there is a 5% chance that the null hypothesis is true. H0 should be rejected. H0 should not be rejected.

Explanation / Answer

Here we will compute z=5.3-5/1/sqrt(500))=-6.7

Now we need to find p value P(z>-6.7)=1

As p value is greater than significance level H0 should not be rejected

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