Question
Suppose that a government agency charged with supporting the home financing market would like to test the hypothesis that the proportion of home mortgages with
Suppose that a government agency charged with supporting the home financing market would like to test the hypothesis that the proportion of home mortgages with negative equity(those that are"underwater") in a certain region of a country is more than 7% higher than the national proportion. A random sample of 191 mortgages from the region found that 73 were underwater. A random sample of 206 mortgages across the country found that 45 were underwater. Complete parts a through c.
a. Using =0.10, perform this hypothesis test for the government agency.
Let p1 represent the population proportion of mortgages from the region that are underwater and let p2 represent the population proportion of mortgages from the country that are underwater. Identify the null and alternative hypotheses. Select the correct choice below and fill in the answer boxes to complete your choice.
(Type integers or decimals. Do notround.)
A.
H0: p1p2<
H1: p1p2
B.
H0: p1p2=
H1: p1p2
C.
H0: p1p2---
H1: p1p2>----
D.
H0: p1p2>
H1: p1p2
E.
H0: p1p2
H1: p1p2<
F.
H0: p1p2
H1: p1p2=
Identify the test statistic.
(Round to two decimal places asneeded.)
Identify the critical value.
z Subscript alpha
z=
(Round to two decimal places asneeded.)
State the conclusions.
--------( reject or no ) the null hypothesis. There------sufficient evidence to conclude that the proportion of home mortgages with negative equity is
more than----- higher than the national proportion.
b. Construct a 90% confidence interval to estimate the difference in the proportion of underwater mortgages for these two populations (regioncountry). Interpret your result.
The confidence interval has a lower limit of ----- and ----- upper limit of
(Round to three decimal places asneeded.)
Based on the confidenceinterval, it-------( can/can not)
be concluded that the proportion of home mortgages with negative equity is more than 7% higher than the nationalproportion, since the confidenceinterval's---------
than----.
c. Determine thep-value and interpret the results.
p-value=----
(Round to three decimal places asneeded.)
Interpret the results.
Thep-value is ------ than the alpha level of 0.1. Therefore, ------ ( reject/or no ) the null hypothesis. This conclusion----- (agrees/or no) with the conclusion made in part a.
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