A manager of the credit department for an oil company would like to determine whether the mean monthly balance of credit card holders is equal to $75.An auditor selects a random sample of 100 accounts and finds that the mean owed is $83.40 with a sample standard deviation of $23.65.If you wanted to test whether the mean balance is different from $75 and decided to reject the null hypothesis,what conclusion could you reach?
A) There is evidence that the mean balance is not $75.
B) There is evidence that the mean balance is $75.
C) There is not evidence that the mean balance is not $75.
D) There is not evidence that the mean balance is $75.

Question

Quizplus · Accepted Answer

The null hypothesis is that the mean monthly balance of credit card holders is equal to $75. The alternative hypothesis is that the mean is different from $75. Since the sample mean is $83.40, which is higher than $75, and the sample standard deviation is $23.65, it is likely that the true mean is not $75. Therefore, if the null hypothesis is rejected, the conclusion would be that there is evidence that the mean balance is not $75.

A Manager of the Credit Department for an Oil Company