TABLE 9-5 A Bank Tests the Null Hypothesis That the Mean Age

question 69

Multiple Choice

TABLE 9-5
A bank tests the null hypothesis that the mean age of the bank's mortgage holders is less than or equal to 45 years, versus an alternative that the mean age is greater than 45 years. They take a sample and calculate a p-value of 0.0202.
-Referring to Table 9-5, if the same sample was used to test the opposite one-tail test, what would be that test's p-value?

• A) 0.0202
• B) 0.0404
• C) 0.9596
• D) 0.9798

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Definitions:

Levered Firm

A company that utilizes debt financing along with equity financing in its capital structure.

Unlevered Value

The value of a firm that is not affected by the decisions of financing, such as the use of debt.

Tax Rate

The fraction of earnings or profits that is subject to taxation for individuals or companies.

Total Debt

The sum of all liabilities and financial obligations a company owes.