The Fair Isaac Corporation (FICO) credit score is used by banks and other lenders to determine whether someone is a good credit risk. Scores range from 300 to 850 with a score of 720 or more indicating that a person is a very good credit risk. An economist wants to determine whether the mean FICO score is more than the cutoff of 720. She finds that a random sample of 50 people had a mean FICO score of 765 with a standard deviation of 98 Can the economist conclude that the mean FICO score is greater than 720? Use the =α0.01 level of significance and the P-value method with the TI-84 Plus calculator. Compute the P-value.
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
The Fair Isaac Corporation (FICO) credit score is used by banks and other lenders to determine whether someone is a good credit risk. Scores
Compute the P-value. Round the answer to at least four decimal places.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
