Question 1:
Mr Owen Shaw claims that the hearsay from business associate is that since 2008-2009 crisis, the pawn broking business has not improved much in terms of loans redemption with interest (high volume of loans redemption with interests represents more profit for the pawn brokers).
Select an appropriate test of hypothesis to determine if the mean amount of loans redeemed, including interest, has increased significantly between pre-financial crisis (2000 - 2009) and post-financial crisis (2010 onwards).
You should include the following:
(a) State the null and alternative hypotheses and explain how you developed these two hypotheses.
(b) Use the output from your software for an appropriate hypothesis test with α = 0.05. List the test statistic you will use for this test. Explain your decision criteria.
(c) Discuss the assumptions you have made in performing the hypothesis test. Are these assumptions reasonable for this case? Please provide explanation/s to substantiate your view.
Question 2:
Interpret the above statistical testing outcome and highlight three (3) possible business or statistical concerns regarding the approach used here in determining whether the mean amount of loans redeemed including interest has significantly improved post-financial crisis.
If your group has a free hand on the project, starting from measurements, sampling, to analysis, what recommendations would you give for the problem in question?
Keep your answer within 400 to 500 words (indicate your word count)