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In: Statistics and Probability

A local insurance agent believed that his local insurance rates were lower than the competing online...

A local insurance agent believed that his local insurance rates were lower than the competing online insurance price rates. For 10 of his clients, he checks the online price quote against their own price quote (local) for their policies. The summary statistics are found in the table below (PriceDiff = Local – Online).

Variable count mean standard dev
local 10 799.2 229.3
online 10 753.3 256.3
price diff 10 45.9 175.7

a. State the conditions and what needs to be assumed for the appropriate hypothesis test.

b. State the hypotheses for the appropriate hypothesis test. Also, calculate the appropriate test statistic, including the degrees of freedom.

c. For the hypothesis test, you should get a p-value of 0.785. Write the p-value as a probability in terms of the test statistic. Also, draw and label the distribution of the test statistic (tdf) and properly label the p-value. I do not want a conclusion.

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Expert Solution

orchestra answered 1 year ago
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