A large regional bank seeks to locate branchoffices in residential communities.

Question

A large regional bank seeks to locate branchoffices in residential communities. The objective is tofocus on home improvement loan, so a community's homes must have a n average age over15 years. I randomly select 130 city property records for Clarksdale and find the mean age of homes to be 15.78 years with a standard deviation of 3.1 years. Is Clarksdale a good candidate for a branch office? please help me I am so confused A large regional bank seeks to locate branchoffices in residential communities. The objective is tofocus on home improvement loan, so a community's homes must have a n average age over15 years. I randomly select 130 city property records for Clarksdale and find the mean age of homes to be 15.78 years with a standard deviation of 3.1 years. Is Clarksdale a good candidate for a branch office? please help me I am so confused

Explanation / Answer

n=130, X_bar=15.78, S=3.1, =15 Let =0.05, Z(0.025)=1.96 (check normal table) The test hypothesis is Ho:15 the test statistics is Z=(X-bar - )/ (S/n) = (15.78 -15)/ (3.1/130) = 2.87 Since Z=2.87>1.96, reject Ho. Thus, clarksdale is a goodcandidate for a branch office.

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