Credit ScoresA Fair Isaac Corporation (FICO) score is used by credit agencies (such as mortgage companies and banks) to assess the creditworthiness of individuals. Values range from 300 to 850, with a FICO score over 700 considered to be a quality credit risk. According to Fair Isaac Corporation, the mean FICO score is 703.5. A credit analyst wondered whether high-income individuals (incomes in excess of \$100,000 per year) had higher credit scores. He obtained a random sample of 40 high-income individuals and found the sample mean credit score to be 714.2 with a standard deviation of 83.2. Conduct the appropriate test to determine if high-income individuals have higher FICO scores at the α = 0.05 level of significance.
Table of contents
- 1. Intro to Stats and Collecting Data1h 14m
- 2. Describing Data with Tables and Graphs1h 56m
- 3. Describing Data Numerically2h 5m
- 4. Probability2h 17m
- 5. Binomial Distribution & Discrete Random Variables3h 6m
- 6. Normal Distribution and Continuous Random Variables2h 11m
- 7. Sampling Distributions & Confidence Intervals: Mean3h 23m
- Sampling Distribution of the Sample Mean and Central Limit Theorem19m
- Distribution of Sample Mean - ExcelBonus23m
- Introduction to Confidence Intervals15m
- Confidence Intervals for Population Mean1h 18m
- Determining the Minimum Sample Size Required12m
- Finding Probabilities and T Critical Values - ExcelBonus28m
- Confidence Intervals for Population Means - ExcelBonus25m
- 8. Sampling Distributions & Confidence Intervals: Proportion2h 10m
- 9. Hypothesis Testing for One Sample5h 8m
- Steps in Hypothesis Testing1h 6m
- Performing Hypothesis Tests: Means1h 4m
- Hypothesis Testing: Means - ExcelBonus42m
- Performing Hypothesis Tests: Proportions37m
- Hypothesis Testing: Proportions - ExcelBonus27m
- Performing Hypothesis Tests: Variance12m
- Critical Values and Rejection Regions28m
- Link Between Confidence Intervals and Hypothesis Testing12m
- Type I & Type II Errors16m
- 10. Hypothesis Testing for Two Samples5h 37m
- Two Proportions1h 13m
- Two Proportions Hypothesis Test - ExcelBonus28m
- Two Means - Unknown, Unequal Variance1h 3m
- Two Means - Unknown Variances Hypothesis Test - ExcelBonus12m
- Two Means - Unknown, Equal Variance15m
- Two Means - Unknown, Equal Variances Hypothesis Test - ExcelBonus9m
- Two Means - Known Variance12m
- Two Means - Sigma Known Hypothesis Test - ExcelBonus21m
- Two Means - Matched Pairs (Dependent Samples)42m
- Matched Pairs Hypothesis Test - ExcelBonus12m
- Two Variances and F Distribution29m
- Two Variances - Graphing CalculatorBonus16m
- 11. Correlation1h 24m
- 12. Regression3h 33m
- Linear Regression & Least Squares Method26m
- Residuals12m
- Coefficient of Determination12m
- Regression Line Equation and Coefficient of Determination - ExcelBonus8m
- Finding Residuals and Creating Residual Plots - ExcelBonus11m
- Inferences for Slope31m
- Enabling Data Analysis ToolpakBonus1m
- Regression Readout of the Data Analysis Toolpak - ExcelBonus21m
- Prediction Intervals13m
- Prediction Intervals - ExcelBonus19m
- Multiple Regression - ExcelBonus29m
- Quadratic Regression15m
- Quadratic Regression - ExcelBonus10m
- 13. Chi-Square Tests & Goodness of Fit2h 21m
- 14. ANOVA2h 29m
9. Hypothesis Testing for One Sample
Performing Hypothesis Tests: Means
Problem 10.3.14b
Textbook Question
SAT Verbal ScoresDo students who learned English and another language simultaneously score worse on the SAT Critical Reading exam than the general population of test takers? The mean score among all test takers on the SAT Critical Reading exam is 501. A random sample of 100 test takers who learned English and another language simultaneously had a mean SAT Critical Reading score of 485 with a standard deviation of 116. Do these results suggest that students who learn English as well as another language simultaneously score worse on the SAT Critical Reading exam?
b. Verify that the requirements to perform the test using the t-distribution are satisfied.
Verified step by step guidance1
Identify the conditions required to use the t-distribution for hypothesis testing. These typically include: (1) the sample is a simple random sample, (2) the population distribution is approximately normal or the sample size is large enough for the Central Limit Theorem to apply, and (3) the population standard deviation is unknown.
Check if the sample is a simple random sample or representative of the population. The problem states it is a random sample of 100 test takers, so this condition is satisfied.
Evaluate the sample size. Since the sample size is 100, which is greater than 30, the Central Limit Theorem suggests the sampling distribution of the sample mean will be approximately normal, even if the population distribution is not perfectly normal.
Confirm that the population standard deviation is unknown. The problem provides a sample standard deviation (116) but does not provide the population standard deviation, so this condition is met.
Conclude that all requirements for using the t-distribution are satisfied because the sample is random, the sample size is large, and the population standard deviation is unknown.
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Key Concepts
Here are the essential concepts you must grasp in order to answer the question correctly.
Hypothesis Testing
Hypothesis testing is a statistical method used to decide whether there is enough evidence to reject a null hypothesis about a population parameter. In this context, it involves comparing the sample mean SAT score of bilingual students to the known population mean to determine if the difference is statistically significant.
Recommended video:
Performing Hypothesis Tests: Proportions
Conditions for Using the t-Distribution
The t-distribution is used when the population standard deviation is unknown and the sample size is relatively small. Key conditions include that the sample is randomly selected, the data are approximately normally distributed or the sample size is large enough (usually n > 30) for the Central Limit Theorem to apply.
Recommended video:
Critical Values: t-Distribution
Sample Mean and Standard Deviation
The sample mean is the average score from the sample group, and the sample standard deviation measures the variability of scores within that group. These statistics are essential for calculating the t-statistic and assessing how the sample compares to the population mean.
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Calculating Standard Deviation
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