a credit score is used by credit agencies (such as mortgage companies and banks) to assess the creditworthiness of individuals. values range from 300 to 850, with a credit score over 700 considered to be a quality credit risk. according to a survey, the mean credit score is . a credit analyst wondered whether high-income individuals (incomes in excess of $100,000 per year) had higher credit scores. he obtained a random sample of high-income individuals and found the sample mean credit score to be with a standard deviation of . conduct the appropriate test to determine if high-income individuals have higher credit scores at the level of significance.

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ogorwyne ogorwyne · Answer 1 · 2022-10-18T15:17:50-04:00

There is insufficient evidence to conclude that those with the high incomes are the ones that have the more credit scores.

We have the bar x = 705.9

The value of n = 34

mean = 724 . 1

standard deviation = 83.4

the level of significance = 5 percent level

The Hypothesis formulation

The null hypothesis H0 = u 705.9

alternative hypothesis = H1 u > 705.9

The t test is given as x - u / s /√n

= (724.1 - 705.9) / (83.4 / √34)

= 1.2725

The degree of freedom = 34 - 1 = 33

The test that we have here is a right tailed test

The p value for the test is given as probability of p (t33 > t)

= 0.1064

From the solution that we have here, we can see that the p value that has been calculated is greater than the level of significance.

Given that this is the case, the decision rule would be for us not to reject the null hypothesis.

There is insufficient evidence to the claim that the high income persons have the greater credit scores.

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