In a study comparing banks in Germany and Great Britain, asample of 145 matched pairs of banks was formed. Each paircontained one bank from Germany an done from Great Britain. Thepairings were made in such a way that the two members were assimilar as possible in regard to such factors as size anda ge(mattched samples). The ratio of total loans outstanding to totalassets was calculated for each of the banks. Fort his ratio, thesample mean difference (German – Great Britain) was 0.0518, and thesample standard deviation of the differences was 0.3055. Testagainst a two-sided alternative, the null hypothesis that the twopopulation means are equal.
For this problem clearly state the
a) null and alternative hypothesis,
b) decision rule and
c) conclusion.
