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I need your help in this question plz.
A financial institution who markets home equity loans is testing two creatives, two interest rates, and 6 lists.
Specifically the creatives are: A. ?Now the best time for a home equity loan?
B. ?Hurry get a home equity loan before rates go up?
The loan terms are: 1. 6.75% APR with 3 points at closing
2. 7.25% APR with 1.5 points at closing
The Lists are List I
List II
List III
List IV
List V
List VI
Total test quantity is 50,000
The preliminary design is shown below:
A. Now is the best time for a home equity loan | B. Hurry get a home equity loan before rates go up | |||
List | 6.75% APR | 7.25% APR | 6.75% APR | 7.25% APR |
I | 2083 | 2083 | 2083 | 2083 |
II | 2083 | 2083 | 2083 | 2083 |
III | 2083 | 2083 | 2083 | 2083 |
IV | 2083 | 2083 | 2083 | 2083 |
V | 2083 | 2083 | 2083 | 2083 |
VI | 2083 | 2083 | 2083 | 2083 |
Answer the questions shown below
A. What is the name of the test design shown above? (2 points)
B. If the financial institution receives a response rate of 1.05% (.0105), for one of the cells provide an assessment of how precisely we can estimate a roll out response at a 95% level of confidence. (create a confidence interval around a proportion) (5 points)
C. Do you think that the financial institution will see interactions in the factors in this test? Explain your reasoning completely. (3 points)
5. (Continued)
D. If it is believed that there is no interaction between the creatives, the loan terms and the lists, propose an alternative test design. Consider a main effects design. Indicate in the matrix below which cells are retained and give the reallocated samples size. (10 points)
A. Now is the best time for a home equity loan | B. Hurry get a home equity loan before rates go up | |||
List | 6.75% APR | 7.25% APR | 6.75% APR | 7.25% APR |
I | ||||
II | ||||
III | ||||
IV | ||||
V | ||||
VI |
For your alternative test design, provide a comparison to the precision (by calculating a confidence interval around the proportion) for a cell receiving a response rate of 1.05% to the preliminary test design. (5 points)
Compare the precision you calculated in part B to the precision calculated in part E. Explain the difference and what it means for each test design. ( 5 points )
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Solution #00070231
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DATE ANSWEREDOct 14, 2020
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