Mathematics, 15.12.2021 22:20 163565
State the null hypothesis, draw a picture, find the critical values, find the statistic and decide what
may be concluded.
An insurance company is reviewing its current policy rates. When originally setting he rates, they
believed that the average claim amount was $1800. They are concerned that the true mean is actually
higher than this, because they could potentially lose a lot of money. They randomly select 40 claims and
calculate a sample mean of $1980. Assume that the standard deviation of claims is $500, and set the
significance level at 0.05. Test to see if the insurance company should be concerned.
3. Hypothesis
4.Statistic
5.Draw a picture of the distribution, shade in the rejection region and label the critical value
6. Conclusion
Answers: 2
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State the null hypothesis, draw a picture, find the critical values, find the statistic and decide w...
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