Before lending someone​ money, banks must decide whether they believe the applicant will repay the loan. one strategy used is a point system

Before lending someone​ money, banks must decide whether they believe the applicant will repay the loan. one strategy used is a point system. loan officers assess information about the​ applicant, totaling points they award for the​ person’s income​ level, credit​ history, current debt​ burden, and so on. the higher the point​ total, the more convinced the bank is that​ it’s safe to make the loan. any applicant with a lower point total than a certain cutoff score is denied a loan. think of this decision as a hypothesis test. since the bank makes its profit from the interest collected on repaid​ loans, their null hypothesis is that the applicant will repay the loan and therefore should get the money. only if the​ person’s score falls below the minimum cutoff will the bank reject the null and deny the loan. complete parts a through c below.

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