The loan manager for State Bank and Trust has claimed that the mean loan balance on outstanding loans at the bank is over $14,500. To test this at a significance level of 0.05, a random sample of n = 100 loan accounts is selected. Assuming that the population standard deviation is known to be $3,000, the null and alternative hypotheses to be tested are: H0 : μ ≤ $14,500 HA : μ $14,500

Question

The loan manager for State Bank and Trust has claimed that the mean loan balance on outstanding loans at the bank is over $14,500. To test this at a significance level of 0.05, a random sample of n = 100 loan accounts is selected. Assuming that the population standard deviation is known to be $3,000, the null and alternative hypotheses to be tested are: H0 : μ ≤ $14,500 HA : μ > $14,500

Quizplus · Accepted Answer

The null hypothesis (H0) typically states that there is no effect or no difference, and it is set up to be possibly rejected in favor of the alternative hypothesis (HA). In this case, H0 posits that the mean loan balance is less than or equal to $14,500, and HA suggests that the mean loan balance is greater than $14,500, which aligns with the claim that needs to be tested. This setup is appropriate for testing if the mean loan balance exceeds $14,500.

The Loan Manager for State Bank and Trust Has Claimed