Ophelia O'Brien,VP of Consumer Credit of American First Banks (AFB),monitors $\alpha$

question 18

Multiple Choice

Ophelia O'Brien,VP of Consumer Credit of American First Banks (AFB) ,monitors the default rate on personal loans at the AFB member banks. One of her standards is "no more than 5% of personal loans should be in default." On each Friday,the default rate is calculated for a sample of 500 personal loans. Last Friday's sample contained 38 defaulted loans. Using $\alpha$ = 0.10,the appropriate decision is _______.

• A) reduce the sample size
• B) increase the sample size
• C) reject the null hypothesis
• D) fail to reject the null hypothesis
• E) do nothing

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Definitions:

Memory Systems

The structures and processes involved in the storage and retrieval of information in the brain.

ACT Models

Cognitive architecture theories that aim to simulate human thought processes, including how people represent knowledge and produce actions based on that knowledge.

Cognitive Economy

A principle in cognitive psychology that suggests the mind strives to simplify information processing by using the most efficient and simplest ways possible.

Spreading Activation

A theory in cognitive science that explains how information is retrieved from networks in the brain, suggesting that activating one concept triggers the activation of related concepts.