A mortgage specialist would like to analyze the average mortgage rates for Atlanta, Georgia. He collects data on the annual percentage rates (APR in %) for 30-year fixed loans as shown in the following table. If he is willing to assume that these rates are randomly drawn from a normally distributed population, can he conclude that the mean mortgage rate for the population exceeds 4.35%? Test the hypothesis at a 10% level of significance. (You may find it useful to reference the appropriate table: z table or t table)

Financial Institution	APR
G Squared Financial		4.615	%
Best Possible Mortgage		4.430
Hersch Financial Group		4.585
Total Mortgages Services		4.790
Wells Fargo		4.865
Quicken Loans		4.415
Amerisave		4.060

Source: MSN Money.com; data retrieved October 1, 2010.

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a. Select the null and the alternative hypotheses.

multiple choice 1

H₀: 4.35; H_A: < 4.35

H₀: 4.35; H_A: > 4.35

H₀: = 4.35; H_A: 4.35

b. Calculate the value of the test statistic. (Round intermediate calculations to at least 4 decimal places and final answer to 2 decimal places.)

c. Find the p-value.

multiple choice 2

0.025 p-value < 0.05

0.01 p-value < 0.025

p-value < 0.01

0.05 p-value < 0.10

p-value 0.10

d. What is the conclusion?

multiple choice 3

Reject H₀ since the p-value is greater than significance level.

Reject H₀ since the p-value is smaller than significance level.

Do not reject H₀ since the p-value is greater than significance level.

Do not reject H₀ since the p-value is smaller than significance level.

e. Make an inference at = 0.100. multiple choice 4

The mean mortgage rate equals 4.35%.

The mean mortgage rate does not equal 4.35%.

The mean mortgage rate exceeds 4.35%.

The mean mortgage rate does not exceed 4.35%.