The federal government has become concerned about the default rates of loans made to students who attend for profit schools. Two random samples of student loans were collected: one from students at for profit schools and another from students at nonprofit schools. The following data show the sample sizes and the number of loans in each sample that defaulted:
a. Perform a hypothesis test using α = 0.05 to determine if the proportion of for profit loans that default is larger than the proportion of loans for nonprofit schools that default.
b. Determine the p value and interpret the results.
c. Construct a 95% confidence interval to estimate the difference in the proportion of loans in default at these two types of schools.
d. Verify your results using PHStat.

  • CreatedJuly 17, 2015
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