The Serious Delinquency Rate Measures the Proportion of Homes That

question 22

Essay

The serious delinquency rate measures the proportion of homes that are well behind on their mortgage payments. A real estate investor is trying to decide in which of two neighborhoods in Phoenix to buy an investment property. He is trying to decide if the serious delinquency rate differs between the two neighborhoods. He took a sample of 70 homes in neighborhood 1 and found 14 homes were seriously delinquent. He took a sample of 80 homes in neighborhood 2 and 10 homes were seriously delinquent.
A) Specify the competing hypotheses to determine if the delinquency rates in the two neighborhoods are equal.
B) Calculate the value of the test statistic and the p-value.
C) Make a conclusion at the 10% significance level. How should the delinquency rate influence the investor's decision?

• A) Specify the competing hypotheses to determine if the delinquency rates in the two neighborhoods are equal.
• B) Calculate the value of the test statistic and the p-value.
• C) Make a conclusion at the 10% significance level. How should the delinquency rate influence the investor's decision?

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