A mortgage specialist would like to analyze the average mortgage rates for Atlanta, Georgia. He studies the following sample
APR quotes. These are the annual percentage rates (APR) for 30-year fixed loans. If he is willing to assume that these rates
are randomly drawn from a normally distributed population, can he conclude that the mean mortgage rate for the
population exceeds 4.2%? Test the hypothesis at a 10% level of significance using (a) the p -value approach and (b) the critical
value approach.
Financial Institution
APR in %
G Squared Financial
4.125
Best Possible Mortgage
4.250
Hersch Financial Group
4.250
Total Mortgages
Services
4.375
Wells Fargo
4.375
Quicken Loans
4.500
Amerisave
4.750
