Statistic

1. Perform a market analysis to study differences between mortgage rates for four different loan terms (e.g., 30 Year Fixed, 15 Year Fixed, 10 Year Fixed, 5/1 ARM) for ten different lending institutions. Make sure your loan terms are identical for each lending institution and that the samples of the loan rates for the ten banks are taken during the same 24-hour time period. Perform an analysis of variance using the Randomized Block Design to determine if there is any statistical difference in the average mortgage rates between the four different loan terms considered in your survey using a 0.05 level of significance.

2. If any of the average rates between the loan terms are determined to be statistically different, use the Tukey Procedure to determine which ones are different.

3. Determine if there is a blocking effect related to the different lending institutions considered in your survey. In other words, do the different lending institutions have statistically different average mortgage rates?

4. Write a report to describe your analysis and report your findings. Report should include the following:

1. 10 page limit, double spaced

2. Sections on Introduction, Methods, Results and Conclusions

3. Appropriate figures and tables to describe your data, analysis and results

4. List all assumptions made in your analysis Report will be graded as follows:

· Introduction. Does the report contain a clear introduction describing the loan terms and lending institutions considered? /10

· Methods. Does the report contain a methods section that describes how the Randomized Block Design is performed? Is the Tukey proceeded described? What are the calculations involved? Are the methods for the hypothesis tests described? /20

· Data. Are the data included in the report or appendices that were used to perform the Randomized Block Design? /10

· Results. Are the results of the analysis clearly described including the ANOVA table that includes the test statistics and p-value (hint: do not just cut and paste the ANOVA table!)? /20

· Hypothesis test. Was the hypothesis test described performed, the null and alternative hypotheses listed, and correct conclusions made? /20

· Tukey Procedure. Is Tukey procedure performed correctly if deemed appropriate? /10

· Conclusions. Is there a conclusion section? Are the conclusions reasonable based on the analysis? /10

You are required to work with a partner for the assignment. Each team is to turn in one report.