A Fair Isaac Corporation (FICO) score is used by credit agencies such as banks to determine whether to lend money and the interest rate to charge. Its value ranges from 300 to 850 and if you have a score over 700, you are considered to be a "quality" credit risk. The mean credit score of average income earners in California is estimated by Fair Isaac to be 664. A recent survey of 47 high income earners in California had a mean FICO score of 677 and a standard deviation of s=60. Use a 0.05 significance level to test the claim that the mean FICO score of high income earners in California is equal to 664, the mean score of average income earners in California.
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
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