A major credit card company is interested in whether there is a linear relationship between its internal rating of a customer’s credit risk and that of an independent rating agency. The company collected a random sample of 200 customers and used the data to test the claim that there is a linear relationship. The following hypotheses were used to test the claim. H0:β1=0Ha:β1≠0 The test yielded a t-value of 3.34 with a corresponding p-value of 0.001. Which of the following is the correct interpretation of the p-value? If the alternative hypothesis is true, the probability of observing a test statistic at least as extreme as 3.34 is 0.001. If the alternative hypothesis is true, the probability of observing a test statistic at least as extreme as 3.34 is 0.001. A If the alternative hypothesis is true, the probability of observing a test statistic of 3.34 or greater is 0.001. If the alternative hypothesis is true, the probability of observing a test statistic of 3.34 or greater is 0.001. B If the null hypothesis is true, the probability of observing a test statistic of 3.34 or greater is 0.001.
A major credit card company is interested in whether there is a linear relationship between its internal rating of a customer’s credit risk and that of an independent rating agency. The company collected a random sample of 200 customers and used the data to test the claim that there is a linear relationship. The following hypotheses were used to test the claim.
H0:β1=0Ha:β1≠0
The test yielded a t-value of 3.34 with a corresponding p-value of 0.001. Which of the following is the correct interpretation of the p-value?
-
If the alternative hypothesis is true, the
probability of observing a test statistic at least as extreme as 3.34 is 0.001.If the alternative hypothesis is true, the probability of observing a test statistic at least as extreme as 3.34 is 0.001.A -
If the alternative hypothesis is true, the probability of observing a test statistic of 3.34 or greater is 0.001.
If the alternative hypothesis is true, the probability of observing a test statistic of 3.34 or greater is 0.001.B -
If the null hypothesis is true, the probability of observing a test statistic of 3.34 or greater is 0.001.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
