the mean loan interest rate of two competing banks is to be compared. twenty-four loans are randomly sampled from each bank. both populations have normal distributions with known standard deviations. in the search to determine if loans from bank 1 have a higher interest rate than loans from bank 2, state the null and alternative hypotheses.

In order for loans from dealership 1 to be different from loans from dealership 2, the mean loan rate of loans from dealership 1 must be greater or less than the mean loan rate of loans from dealership 2.

In other words, the mean loan rate must be unequal: μ1≠μ2. The null hypothesis must have some form of equality, so Ha is μ1≠μ2 and H0 is μ1=μ2.

What is null hypothesis?

The alternate hypothesis is the antithesis of the null hypothesis, or H0, which is the widely acknowledged truth. Researchers try to refute, reject, or nullify the null hypothesis. Researchers develop a competing hypothesis that they believe explains a phenomenon before working to disprove the null hypothesis.

The null hypothesis in inferential statistics is that two scenarios are equal. The underlying assumption is that the discrepancy is just the result of chance. It is feasible to determine the probability that the h0 is correct using statistical testing.