PROBLEM 1 The Fair Isaac Corporation (FICO) credit score is used by banks and other lenders to determine whether someone is a good credit risk. Scores range from 300 to 850, with a score of 720 or more indicating that a person is a very good credit risk. An economist wants to determine whether the mean FICO score is lower than the cutoff of 720. She finds that a random sample of 101 people had a mean FICO score of 703 with a standard deviation of 92. Can the economist conclude that the mean FICO score is less than 720? Use the =0.05 level of significance. State the hypotheses to be tested.
a. H_{0}: \mu \geq 720\\H_{1}: \mu < 720
b. H_{0}: \mu \leq 720\\H_{1}: \mu > 720
c. H_{0}: \mu > 720\\H_{1}: \mu \leq 720
d. H_{0}: \mu = 720\\H_{1}: \mu \neq 720
Furthermore, Identify the type of statistical test to be used.
a.
Z-TEST
b.
Question 2 ;
Compute the value of the test statistic. (Round to three decimals.)
Question 3:
Report the critical value associated with a 5% level of significance. Round to three decimals.
Question 4:
Compute and report the p-value of the test. Round to four decimals.
1-prop Z-TEST
c.
T-TEST