Question

A mortgage speclallst would like to analyze the average mortgage rates for Atlanta, Georgla. He collects data on the annual percentage rates (APR In %) for 30-year fixed loanG as shown In the following table. If he is willing to assume that theGe rateG 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 table) Financial Institution G Squared Financial Best Possible Mortgage Hersch Financial Group Total Mortgages Services Wells Fargo Quicken Loans Amerisave 4, 125% 4.258 4.258 4.375 4.375 4.588 4.758 Source: MSN Money.com; data retrieved October1, 2010. a. Select the null and the alternative hypotheses. b. 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 0 005 s pvalue < 010 Op-value 2 010 d. What Is the conclusion? o Reject на since the p value is greater than significance level. Reject Hg sInce the p-value is smaller than slgnificance level. Do not reject e since the p-value Is greater than significance level. Do not reject g sInce the p-value Is smaller than significance level. e. Make an inference at α-010. O The mean mortgage rate equals 4.2%. O The mean mortgage rate doeG not equal 4.2% O The mean mortgage rate exceeds 4.2%. O The mean mortgage rate is less than 4.2%.

Answer 1