Discuss the below:
The Senior Management of a large multi-state bank, American Flag Bank, has proposed to its Board of Directors introducing a host of new fees/charges, including substantial interest rate increases on preexisting loans. Concerned about a backlash from customers, not to mention regulators and Congress, the Board has directed management to test the idea that the new fees/charges may result in a substantial loss of customers.
In particular, the Board thinks it is unwise to introduce the new fees/charges unless there is very strong evidence that p, the true proportion of customers who say they will switch banks if the new fees/charges are introduced, is less than .10.
Therefore, the Board has directed that management may introduce the new fees/charges if and only if the null hypothesis : p = 0.10 can be rejected in favor or the alternative hypothesis : p < 10 at the .01 level of significance. To test the hypotheses, a random sample of 1,000 customers is surveyed to determine if they would switch banks if the bank introduces the proposed new fees/charges, and 85 in the sample indicate that they will definitely switch banks if the new fees/charges are put in place.
Help Management and the Board out by using MegaStat to run a hypothesis test to address their concerns.
What is the p-value, and how much, if any, evidence is there to reject the null hypothesis: : p = 0.10 and accept the alternative hypothesis
The weight of evidence against the null hypothesis, and in support of the alternative hypothesis is:
Some evidence, strong evidence, very strong evidence, extremely strong evidence?