Answer
We do not reject the null hypothesis. Thus, we do not have sufficient evidence that high-income individuals have higher FICO scores.
Work Step by Step
Here we have: $H_{o}$: μ = 703.5, $H_{a}$: μ > 703.5, n = 40, x̅ = 714.2, s = 83.2 and α = 0.05
Using the classical approach:
Using Table VI, we have: t = 1.685
$σ_{ x̅} = \frac{s}{\sqrt n} = \frac{83.2}{\sqrt 40} = 13.155$
$t = \frac{714.2 - 703.5}{13.155} = 0.813$
Since, 0.813 < 1.685, we fail to reject the Null hypothesis.
