This is a question posted by a prof of mine, it was posted yesterday, due tomorrow, he does not answer e-mails and I don't know where to begin.
Are approved loans inclusive of those rejected by the applicant do you think?
for the first hypothesis H_0 we are making a null hypothesis asking if the real probability of a black person being approved for a loan is higher than the estimated probability (based on proportions) of the a white person being approved against an alternative hypothesis that it is less?
How do I set that up? Do I use P-values?
for the second hypothesis we are creating a hypothesis asking if the probability of that a white person is approved equal to the estimated probability that a white person is approved against the alternate hypothesis that the actual probability of a hispanic person being approved is less than the estimated probability of the white person being approved.
What does "the expected value of a Bernoulli variable is pi" mean? I assume pi is not 3.14, but how does one find it? Is there anything special one has to do to find the E(x) of a Bernoulli variable?
I find the whole thing confusing.