The mortgage department of a large bank is interested in the nature of loans of first-time borrowers. This information will be used to tailor their marketing strategy. They believe that the probability that the first-time borrowers take out smaller loans than other borrowers is 0.34. They perform a hypothesis test to determine if the probability is the same or different from 0.34. They sample 111 first-time borrowers and find 83 of these loans are smaller that the other borrowers. What is the test statistics to test the null hypothesis H0: p = 0.34 against the alternative hypothesis Ha: p ≠0.34?
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A bank has recently acquired a new branch and thus has customers in this new territory. They are interested in the default rate in their new territory. They wish to test the hypothesis that the default rate is different from their current customer base. They sample 78 files in area A, their current customers, and find that 41 have defaulted. In area B, the new customers, another sample of 106 files shows 79 have defaulted on their loans. What is the Test Statistics to test the Null Hypothesis H0 : pA = pB against the alternative Ha : pA ≠pB?
Sri K.
Adi S.
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