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PracticeFinal

PracticeFinal - BA 240 W Li Practice Final Problem 1...

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BA 240 W. Li Practice Final 1 Problem 1 : Bankrate.com reports mortgage loan interest rates for 30-year and 15-year fixed-rate mortgage loans for 9 randomly selected Willamette Valley lending institutions. Assuming normality, a financial analyst would like to determine whether there is a difference between mean 30-year rates and mean 15-year rates. Lending Institution 1 2 3 4 5 6 7 8 9 30-Year 6.715 6.748 6.740 6.597 6.425 6.880 6.900 6.675 6.790 15-Year 6.599 6.367 6.550 6.362 6.162 6.583 6.800 6.394 6.540 a) State null hypothesis and alternative hypothesis. (4 points) Ho: Ha: b) Calculate the value of the test statistics. Specify the test statistic (“z” or t”) clearly. (6 points) c) Find the p -value using the appropriate table. Draw the curve and highlight the corresponding area. (4 points) d) At the .05 significance level, do you reject or retain the null hypothesis? Circle the correct answer and explain using the p-value found in part c). (2 points) Reject Ho / Retain Ho Why? e) Interpret the result, this includes the weight of evidence, the conclusion, and the significance level. (4 points)

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BA 240 W. Li Practice Final 2 Problem 2 : A large discount chain compares the performance of its credit managers in Ohio and Illinois by comparing the mean dollar amounts owed by customers with delinquent charge accounts in these two states. 10 delinquent accounts were randomly selected from Ohio and 10 delinquent accounts were randomly selected from Illinois. Here we would like to test whether there is a difference between the population mean dollar amounts owed by customers with delinquent charge accounts in Ohio and Illinois.
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