Answer to Question #195985 in Statistics and Probability for zub

Question

The mean interest rate for credit cards was reported to be 18.8. A financial officer wishes to study whether the increased competition in the credit card business has reduced interest rates. A sample of 15 credit card is randomly selected and the interest rates are found to be:

18, 13, 14, 13.5, 12.2, 15, 15.4, 12.8, 14.6, 16, 15.8, 16.5, 13.8, 17, 14.8

a) State the appropriate hypotheses to test whether the increased competition in the credit card business has reduced interest rates. [2 marks]

b) Determine the mean and standard deviation of the sample of credit card interest rates. [3 marks]

c) Test the hypotheses stated in part (a) at a 5% level of significance, and comment on your findings. [5 marks]