A mortgage is a type of loan that can be used to purchase a house. A large bank is interested in the relationship between a customers’ years of experience in their current job and the mortgage amount for customers with a mortgage. They selected 100 customers with a mortgage at random and used the data to test the claim that there is a negative linear relationship between years of experience in the current job and mortgage amount. The following hypotheses were used to test the claim. H0:β1=0Ha:β1<0 The test yielded a t-value of −3.865 with a corresponding p-value of 0.0001. Which of the following is the correct interpretation of the p-value? If the alternative hypothesis is true, the probability of observing a test statistic of −3.865 or smaller is 0.0001. A If the alternative hypothesis is true, the probability of observing a test statistic of −3.865 or greater is 0.0001. B If the null hypothesis is true, the probability of observing a test statistic of −3.865 or greater is 0.0001. C If the null hypothesis is true, the probability of observing a test statistic of −3.865 is 0.0001. D If the null hypothesis is true, the probability of observing a test statistic of −3.865 or smaller is 0.0001. E
A mortgage is a type of loan that can be used to purchase a house. A large bank is interested in the relationship between a customers’ years of experience in their current job and the mortgage amount for customers with a mortgage. They selected 100 customers with a mortgage at random and used the data to test the claim that there is a negative linear relationship between years of experience in the current job and mortgage amount. The following hypotheses were used to test the claim.
H0:β1=0Ha:β1<0
The test yielded a t-value of −3.865 with a corresponding p-value of 0.0001. Which of the following is the correct interpretation of the p-value?
-
If the alternative hypothesis is true, the
probability of observing a test statistic of −3.865 or smaller is 0.0001.A -
If the alternative hypothesis is true, the probability of observing a test statistic of −3.865 or greater is 0.0001.
B -
If the null hypothesis is true, the probability of observing a test statistic of −3.865 or greater is 0.0001.
C -
If the null hypothesis is true, the probability of observing a test statistic of −3.865 is 0.0001.
D -
If the null hypothesis is true, the probability of observing a test statistic of −3.865 or smaller is 0.0001.
E
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