Ophelia McPhee, VP of Consumer Credit, Confederation First Bank (CFB), monitors the default rate on personal loans among CFB members.One of her standards is: "no more than 5% of personal loans should be in default." On each Friday, the default rate is calculated for a sample of 500 personal loans.Last Friday's sample contained 30 defaulted loans.Ophelia's null hypothesis is ___.
A)p 0.05
B)p = 0.05
C)$\mu$$\le$ 30
D)$\mu$ 30
E)s 30

Question

Ophelia McPhee, VP of Consumer Credit, Confederation First Bank (CFB), monitors the default rate on personal loans among CFB members.One of her standards is: "no more than 5% of personal loans should be in default." On each Friday, the default rate is calculated for a sample of 500 personal loans.Last Friday's sample contained 30 defaulted loans.Ophelia's null hypothesis is ___.
A)p > 0.05
B)p = 0.05
C)$\mu$$\le$ 30
D)$\mu$> 30
E)s > 30

Quizplus · Accepted Answer

The null hypothesis is that the default rate is equal to the standard, which is 5% or 0.05.

Ophelia McPhee, VP of Consumer Credit, Confederation First Bank (CFB) μ\muμ

Ophelia McPhee, VP of Consumer Credit, Confederation First Bank (CFB) $\mu$