Recently, Experian Reported That the Average Credit Score for a New-

question 101

Multiple Choice

Recently, Experian reported that the average credit score for a new- car loan was 753. Suppose Ally Financial, a bank holding company that finances car loans, would like to test the hypothesis that the average credit score has increased since the Experian report. A random sample of 20 new- car loans had an average credit score of 764.2 with a sample standard deviation of 34.5. Ally Financial would like to set α = 0.05. Which one of the following statements is true?

• A)Because the p- value is less than α, we fail to reject the null hypothesis and conclude that the
• B)Because the p- value is less than α, we reject the null hypothesis and cannot conclude that the average credit score for a new- car loan is more than 753.
• C)Because the p- value is greater than α, we reject the null hypothesis and conclude that the average credit score for a new- car loan is more than 753.
• D)Because the p- value is greater than α, we fail to reject the null hypothesis and cannot conclude that the average credit score for a new- car loan is more than 753.

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Definitions:

Lurking Variables

Hidden variables that are not measured in a study but can influence the relationship between the studied variables, potentially leading to misleading conclusions.

Statistical Methodology

The collection of methods and practices used in the collection, analysis, interpretation, and presentation of data.

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Regression Analysis

A statistical method that investigates the relationship between a dependent variable and one or more independent variables.