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 705.6. 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 34 high-income individuals and found the sample mean credit score to be 724.4 with a standard deviation of 84.4. Conduct the appropriate test to determine if high-income individuals have higher credit scores at the α=0.05 level of significance. 1) Find: P-value 2) Make a conclusion regarding the hypothesis.
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
A credit score is used by credit agencies (such as mortgage companies and banks) to assess the creditworthiness of individuals. Values
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