The interest rate at which London banks lend money to one another is called the London interbank offered mte, or Libor. According to The Wall Street Journal (Nov. 11, 1998). the British Bankers Association regularly surveys international banks for the Libor ratc. One recent rcport had the average Libor rate at .39 percent for 3-month loans-a value considered high by many Western banks.

Set up the null and alternative hypothesis for testing the reportcd value.