In August 2010, Massachusetts Enacted a 150-Day Right-To-Cure Period That

question 7

Multiple Choice

In August 2010, Massachusetts enacted a 150-day right-to-cure period that mandates that lenders give homeowners who fall behind on their mortgage an extra five months to become current before beginning foreclosure proceedings. Policymakers claimed that the policy would result in a higher proportion of delinquent borrowers becoming current on their mortgages. To test this claim, researchers took a sample of 244 homeowners in danger of foreclosure in the time period surrounding the enactment of this law. Of the 100 who fell behind just before the law was enacted, 30 were able to avoid foreclosure, and of 144 who fell behind just after the law was enacted, 48 were able to avoid foreclosure. Let p₁ and p₂ represent the proportion of delinquent borrowers who avoid foreclosure just before and just after the right-to-cure law is enacted, respectively. Which of the following is the appropriate test statistic value to analyze the claim at the 10% significance level?

• A) t₂₄₃ = −0.549
• B) t₂₄₃ = 0.549
• C) z = −0.549
• D) z = 0.549

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Definitions:

Column Percentages

Represents the percentages that each value in a column represents out of the total for the column, often used in statistical analysis to summarize categorical data.

Row Percentages

The percentages of each category within a row in a contingency table, often used in categorical data analysis.

Frequencies

The rate at which a repeated event occurs, often used in the context of how often different values appear in a dataset.

Stacked Bar Chart

A graphical representation of data where bars divided into sub-parts represent the whole and its segments.