What is an Hypothesis?
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Hypothesis: The local car dealership that offers in house financing has a large percentage of accounts that are past due because of the lenient credit profile they utilize to approve financing.
A hypothesis is a statement that variables are assigned to the case. (Cooper & Schindler, 2011) In the above hypothesis the case is accounts past due and the variable is the lenient credit profiles that are utilized for approving finance. My hypothesis has adequacy for its purpose, is testable. I believe my hypothesis needs to be strengthened to be better than its rivals. When utilizing the chart on page 64 of our text I do find several areas for improvement. After going through the checklist I believe that a better hypothesis would be made after an initial analysis of the percentage of late payments and the minimum credit scores. A hypothesis could then be created that is more specific and testable as well as analyzed against other statistics such as the percentage of late payments for a higher, specified credit score. If research shows 70% of customers that have late payments have a credit score below 600 a stronger hypothesis would state: If the local car dealership that offers in house financing requires a credit score higher than 600 for approved financing the percentage of late payments they receive will be less than 70%.
Adequacy for its purpose | |
*Does the hypothesis reveal the original problem condition? | Yes, the problem is a large amount of accounts that are past due. |
*Does the hypothesis clearly identify facts that are relevant | It clearly states facts regarding financing approval but does not |
and those that are not? | include any other facts, relevant or not. |
*Does the hypothesis clearly state the condition, size, or | It only states that lenient profiles are used, this should be |
distribution of some variable in terms of values meaningful | made stronger by listing a specific minimum credit score |...