Question

A finance journal, which publishes research on current financial topics, states that the maturity term for a certificate of deposit is, on average, 10 years. A banker believes the average maturity term at their bank is different than the amount quoted in the finance journal. After completing a study, the banker found that the average maturity term for a certificate of deposit is 8 years, on average.

Required:
As the banker sets up a hypothesis test to determine if their belief is correct, what is the banker's claim?

Answer 1

Following are the solution to the given question:

Explanation:

In this the hypothesis is:

`H_(0):\mu=10\\\\H_(1):\mu\\eq10`

The bankers assert that their bank's average maturity was distinct from that of ten years, that's why the hypothesis of the alternative.