1. Bankrate.com reports mortgage loan interest rates for 30-year and 15-year fixed- rate mortgage loans for 9 randomly selected lending institutions. Assuming normality, a financial analyst would like to determine whether there is a difference between mean 30-year rates and mean 15-year rates. Alpha = 0.05 Ho: Ha: 30 year 15 year Decision: 1 6.72 6.60 2 6.75 6.37 3 6.74 6.55 Lending Institutions 4 6.60 6.36 n= 5 6.43 6.16 6 6.88 6.58 df = mean of differences = 7 6.90 6.80 8 6.68 6.39 alpha = 5% standard deviation of differences = 0.089 9 6.80 6.54
1. Bankrate.com reports mortgage loan interest rates for 30-year and 15-year fixed- rate mortgage loans for 9 randomly selected lending institutions. Assuming normality, a financial analyst would like to determine whether there is a difference between mean 30-year rates and mean 15-year rates. Alpha = 0.05 Ho: Ha: 30 year 15 year Decision: 1 6.72 6.60 2 6.75 6.37 3 6.74 6.55 Lending Institutions 4 6.60 6.36 n= 5 6.43 6.16 6 6.88 6.58 df = mean of differences = 7 6.90 6.80 8 6.68 6.39 alpha = 5% standard deviation of differences = 0.089 9 6.80 6.54
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Analyst wants to determine if there is a difference. tcrit for 2 tails, 5% alpha, df 8 pvalue estimation from the table?
![1. Bankrate.com reports mortgage loan interest rates for 30-year and 15-year fixed-
rate mortgage loans for 9 randomly selected lending institutions. Assuming
normality, a financial analyst would like to determine whether there is a difference
between mean 30-year rates and mean 15-year rates. Alpha = 0.05
Ho:
Ha:
30 year
15 year
Decision:
1
6.72
6.60
2
6.75
6.37
3
6.74
6.55
Lending Institutions
4
6.60
6.36
n =
5
6.43
6.16
6
6.88
6.58
df =
7
6.90
6.80
8
6.68
6.39
alpha = 5%
mean of differences =
standard deviation of differences = 0.089
9
6.80
6.54](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F953e3ae3-1a36-4eca-a542-ddeb8c6ae72a%2Fc606906f-85be-475a-8844-adad8df34be0%2Fxk1brha_processed.png&w=3840&q=75)
Transcribed Image Text:1. Bankrate.com reports mortgage loan interest rates for 30-year and 15-year fixed-
rate mortgage loans for 9 randomly selected lending institutions. Assuming
normality, a financial analyst would like to determine whether there is a difference
between mean 30-year rates and mean 15-year rates. Alpha = 0.05
Ho:
Ha:
30 year
15 year
Decision:
1
6.72
6.60
2
6.75
6.37
3
6.74
6.55
Lending Institutions
4
6.60
6.36
n =
5
6.43
6.16
6
6.88
6.58
df =
7
6.90
6.80
8
6.68
6.39
alpha = 5%
mean of differences =
standard deviation of differences = 0.089
9
6.80
6.54
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