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Question: a mortgage specialist would like to analyze the average mortgage...

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A mortgage specialist would like to analyze the average mortgage rates for Atlanta, Georgia. He collects data on the annual percentage rates (APR in %) for 30-year fixed loans as shown in the following table. 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 the 10% level of significance. (You may find it useful to reference the appropriate table: z table or t table) Financial Institution G Squared Financial Best Possible Mortgage Hersch Financial Group Total Mortgages Services Wells Fargo Quicken Loans Amerisave APR 4.125% 4.250 4.250 4.375 4.375 4.500 4.750 Source: MSN Money.com; data retrieved October 1, 2010. lic XC a. Select the null and the alternative hypotheses. H0 : μ 4.2; HA: μ > 4.2b. Calculate the value of the test statistic. (Round intermediate calculations to at least 4 decimal places and final answer to 2 decimal places.) Test statistic c. Find the p-value. Op-value <0.01 0.01 s p-value<0.025 0.025 s p-value <0.05 0.05 sp-value<0.10 O p-value z 0.10 d. What is the conclusion? Reject Ho since the p-value is greater than significance level. Reject Ho since the p-value is smaller than significance level. Do not reject Ho since the p-value is greater than significance level. Do not reject Ho since the p-value is smaller than significance level.e. Make an inference at α 0.10. O The mean mortgage rate equals 4.2% The mean mortgage rate does not equal 4.2%. O The mean mortgage rate exceeds 4.2%. The mean mortgage rate is less than 4.2%.

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