Question

In: Statistics and Probability

Suppose a newspaper article states that the distribution of auto insurance premiums for residents of California...

Suppose a newspaper article states that the distribution of auto insurance premiums for residents of California is approximately normal with a mean of 1502. The article also states that 10% of California residents pay more than 1940. 1. What is the Z score that corresponds to the top 10% (or the 90th percentile) of the standard normal distribution? Round your answer to 4 decimal places. -.7742 2. What is the mean insurance cost? 3. What is the cutoff for the 90th percentile? 4. Identify the standard deviation of insurance premiums in LA. Round your answer to two decimal places. Hint: Use the information from the first 3 questions in this problem and the formula for finding the z-score.

Solutions

Expert Solution

1)

Z score that corresponds to the top 10% = 1.2816

2)

mean insurance cost =1502

3)

cutoff for the 90th percentile =1940

4)

standard deviation =(1940-1502)/(1.2816)=341.76

orchestra answered 2 years ago
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