a. Choose the appropriate null and alternative hypotheses. H0: Interest rate received is independent of race.; HA: Interest rate received is dependent on race. H0: Interest rate received is dependent of race.; HA: Interest rate received is independent on race. b-1. Calculate the value of the test statistic. (Round intermediate calculations to at least 4 decimal places and final answer to 3 decimal places.) b-2. Find the p-value. p-value < 0.01 0.01 ≤ p-value < 0.025 0.025 ≤ p-value < 0.05 0.05 ≤ p-value < 0.10 p-value ≥ 0.10 c. What is your conclusion?
A study by the Massachusetts Community & Banking Council found that black people, and, to a lesser extent, Latinx, remain largely unable to borrow money at the same interest rate as whites (The Boston Globe, February 28, 2008). The following
Type of Interest Rate on Loan | ||
---|---|---|
Race | High Interest Rate | Lower Interest Rate |
Black | 553 | 480 |
Latino | 265 | 324 |
White | 491 | 3,701 |
At the 5% significance level, do the data indicate that the interest rate received on a loan is dependent on race?
a. Choose the appropriate null and alternative hypotheses.
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H0: Interest rate received is independent of race.; HA: Interest rate received is dependent on race.
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H0: Interest rate received is dependent of race.; HA: Interest rate received is independent on race.
b-1. Calculate the value of the test statistic. (Round intermediate calculations to at least 4 decimal places and final answer to 3 decimal places.)
b-2. Find the p-value.
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p-value < 0.01
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0.01 ≤ p-value < 0.025
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0.025 ≤ p-value < 0.05
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0.05 ≤ p-value < 0.10
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p-value ≥ 0.10
c. What is your conclusion?
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Reject H0; there is enough evidence to support the claim that interest rate and race are dependent.
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Reject H0; there is not enough evidence to support the claim that interest rate and race are dependent.
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Do not reject H0; there is enough evidence to support the claim that interest rate and race are dependent.
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Do not reject H0; there is not enough evidence to support the claim that interest rate and race are dependent.
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