Q1) Recent default rate on all student loans is 5.2%. In recent random sample of 300 loans at private universities there were 9 defaults.

Question 1:

Does this sample illustrate enough evidence that private university loan default rate is below rate for all universities, using left-tailed test at α = .01?

a) Select the suitable hypothesis.

H₀: π ≥ .052; H₁: π < .052. Reject H₀ if z < -2.33.

H₀: π ≥ .052; H₁: π < .052. Accept H₀ if z < -2.33

b) What is the z score for the sample data?

c) Must the null hypothesis be rejected?

Yes

No

Question 2:

a) Compute the p-value.

b) Supposition of normality is justified.

Yes

No