Part 4: Multiple choice 1. What is a Type II error? a. Rejecting a false null hy
ID: 3268689 • Letter: P
Question
Part 4: Multiple choice
1. What is a Type II error?
a. Rejecting a false null hypothesis.
b. Rejecting a true null hypothesis.
c. Failing to reject a true null hypothesis.
d. Failing to reject a false null hypothesis
2. A Fair Isaac Corporation (FICO) score is used by credit agencies to assess the creditworthiness of individuals. Its value ranges from 300 to 850. An individual with a FICO score over 700 is considered to be a quality credit risk. According to Fair Isaac Corporation, the mean FICO score is 703.5. A credit analyst wondered whether high-income individuals had higher credit scores. Using a random sample of 40 high-income individuals, a test was conducted at the 0.05 level of significance. Choose the appropriate conclusion to this test.
MINITAB RESULTS Test of mu = 703.5 vs mu > 703.5
Variable N Mean StDev SEMean T P-Value
Time 40 714.2 83.2 13.16 0.81 0.21
a. Since the P-value is greater than the level of significance, we reject the null hypothesis and we have enough evidence to conclude that high-income individuals had higher credit scores.
b. Since level of significance is smaller than the P-value, we reject the null hypothesis and we have enough evidence to conclude that high-income individuals had higher credit scores.
c. Since the P-value is greater than the level of significance, the test is inconclusive.
d. Since the P-value is greater than the level of significance, we fail to reject the null hypothesis and we do not have enough evidence to conclude that high-income individuals had higher credit scores. e. Since the P-value is greater than the level of significance, we reject the alternative hypothesis and we have enough evidence to conclude that the mean FICO score is 703.5
Explanation / Answer
1. correct option:
d. Failing to reject a false null hypothesis
2. Correct opton:
d. Since the P value is greater than the level of significance, we fail to reject the null hypothesis and we do not have enough evidence to conclude that high income individuals hadhigher credit scores.