Question
In: Finance
A car insurance company would like to determine the proportion of accident claims covered by the...
A car insurance company would like to determine the proportion of accident claims covered by the company. According to a preliminary estimate 40% of the claims are covered. How large a sample should be taken to estimate the proportion of accident claims covered by the company if we want to be 90% confident that the sample percentage is within 2% of the actual percentage of the accidents covered by the insurance company?
Solutions
Expert Solution
z value for 90% = 1.64
p = 40% = 0.4
d = margin of error = 2% = 0.02
Hence, sample size, n = (z)2 p ( 1 – p ) /
d2 = 1.642 x 0.4 x (1 - 0.4) /
0.022 = 1,614
jeff jeffy answered 2 years agoRelated Solutions
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