Carl Allen and Norm Nixon are two loan officers at Brea Federal Savings and Loan Bank. The

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Carl Allen and Norm Nixon are two loan officers at Brea Federal Savings and Loan Bank. The bank manager is interested in comparing the default rate on the loans approved by Carl to the default rate on the loans approved by Norm. In the sample of loans collected, there are 60 loans approved by Carl (9 of which defaulted) and 80 loans approved by Norm (7 of which defaulted). 

a. State the hypothesis test that the default rates are the same for the two loan officers. 

b. What is the sample default proportion for Carl? For Norm? 

c. Use a .05 level of significance. What is the p-value and what is your conclusion?

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Statistics For Business & Economics

ISBN: 9781337901062

14th Edition

Authors: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran

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