A bank issues credit cards to its customers. A main factor in determining whether a credit card will be profitable to the bank is the average monthly balance that the customer will maintain on the card that will be subject to finance charges.
A bank issues credit cards to its customers. A main factor in determining whether a credit card will be protable to the bank is the average monthly balance that the customer will maintain on the card that will be subject to nance charges. Bank analysts wish to determine whether there is a relationship between the average monthly credit card balance and the income stated on the original credit card application form. The accompanying table contains the sample data that have been collected from existing credit card customers. Complete parts a through d below. Use a = 0.10 where needed. a Click here to view the data table. a. Indicate which variable is to be the independent variable and which is to be the dependent variable in the bank's analysis. 0 A. The dependent variable is the bank's prot, and the independent variable is the income. 0 B. The dependent variable is the bank's prot, and the independent variable is the credit card balance. 0 C. The dependent variable is the income, and the independent variable is the credit card balance. 0 D. The dependent variable is the credit card balance, and the independent variable is the income. \fb. Construct a scatter plot for these data and describe what relationship appears to exist between these two variables. Choose the correct graph below. O A. O B. O C. OD. AIncome AIncome 65000- 2500- 65000- 2500- Credit Card Balance Credit Card Balance 20000- O+ TH 20000- 0 2,500 20,000 65,000 0 65,000 Income 2,500 20,000 Credit Card Balance Credit Card Balance Income There appears to be relationship between x and y. c. Calculate the corre these two variables and test to determine whether there is a significant correlation at the a = 0.10 level. a negative r= (Round to thre needed.) a positive What are the appropr no est for this correlation coefficient?c. Calculate the correlation coefficient for these two variables and test to determine whether there is a significant correlation at the a = 0.10 level. r= (Round to three decimal places as needed.) What are the appropriate hypotheses to test for this correlation coefficient? OA. Ho: P = 0 OB. Ho: p20 HA: P #0 HA: P o HA: P >0 HA: pso OE. Ho: pro OF. Ho: p#0 HA: P20 HA: P = 0 Calculate the t-test statistic for correlation. t= (Round to three decimal places as needed.)Determine the rejection region for the test statistic t. Select the correct choice below and fill in the answer box(es) to complete your choice. (Round to three decimal places as needed.) O A. If t> to.10 = , reject the null hypothesis. Otherwise, do not reject the null hypothesis O B. Ift to.05 = , reject the null hypothesis. Otherwise, do not reject the null hypothesis. Since the test statistic in the rejection region, the null hypothesis. The data support the linear relationship between income and credit card balance
