A Particular Bank Has Two Loan Modification Programs for Distressed

question 85

Multiple Choice

A particular bank has two loan modification programs for distressed borrowers: Home Affordable Modification Program (HAMP) modifications,where the federal government pays the bank $1,000 for each successful modification,and non-HAMP modifications,where the bank does not receive a bonus from the federal government.In order to qualify for a HAMP modification,borrowers must meet a set of financial suitability criteria.What type of hypothesis test should we use to test whether borrowers from this particular bank who receive HAMP modifications are more likely to re-default than those who receive non-HAMP modifications?

• A)A hypothesis test for .
• B)A hypothesis test for .
• C)A matched-pairs hypothesis test.
• D)We are unable to conduct a hypothesis test since independent random samples of each group could not be collected.

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