A sample of 30-year fixed mortgage rates at 12 randomly chosen credit unions yie

Question

A sample of 30-year fixed mortgage rates at 12 randomly chosen credit unions yields a mean rate of 6.65% and a sample standard deviation of 0.39%. A sample of 30-year fixed mortgage rates at 16 randomly selected banks yields a mean rate of 7.05% and a sample standard deviation of 0.22%. Are the mean rates different between credit unions and banks? Relevant output is shown in the accompanying table. Which of the following is true?

Two-Sample t-Test and cI Sample N Mean StDev SE Mean 12 6.650 0.390 0.11 16 7.050 0.220 0.055 Difference = mu (1)-mu (2) Estimate for difference:-0.400 95% CI for difference: (-0.665,-0.135) T-Te3t of difference=0 (v3 not =): 1-Value=-2.69 P-Value =0.013 DE = 23.85 I. This is a paired design Il. This is a test of two means from independent samples. IlI. This is a one tailed test. O A. I only O B. Both Il and III O C. Il only O D. 111 only

Explanation / Answer

This is not a paired design because the credit unions and banks were selected random. Also, the alternatie hypothesis contains "not =" sign so this test is two tailed.

Hence, Only II is correct.

Option C is correct.

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