Before lending someone​ money, banks must decide whether theybelieve the applicant will repay the loan. One strategy used is apoint 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 higherthe point​ total, the more convinced the bank is that​ it's safe tomake the loan. Any applicant with a lower point total than acertain cutoff score is denied a loan. Think of this decision as ahypothesis test. Since the bank makes its profit from the interestcollected on repaid​ loans, their null hypothesis is that theapplicant will repay the loan and therefore should get the money.Only if the​ person's score falls below the minimum cutoff will thebank reject the null and deny the loan. Complete parts a through cbelow.

a) In this context, what is meant by the power of the test?

A. The power is the probability that the bank approves a loanthat will be repaid.

B. The power is the probability that the bank denies a loan thatwould have been repaid.

C. The power is the probability that the bank approves a loanthat will not be repaid.

D. The power is the probability that the bank denies a loan thatwould not have been repaid.

b) What could the bank do to increase the power?

A. The bank could hire additional loan officers to assess each​applicant's information.

B. The bank could lower the cutoff score.

C. The bank could raise the cutoff score.

D. The bank could scrap the point system.

c) What is the disadvantage of taking the action in part b)?

A. A larger number of untrustworthy people would have theirloans​ approved, and the bank would lose money from those unpaidloans.

B. The bank would have to spend more money on the additionalloan officers.

C. The bank would have to spend additional time and moneydeveloping a new system.

D. A larger number of trustworthy people would be denied​credit, and the bank would miss the opportunity to collect intereston those loans.