Question

In: Statistics and Probability

Suppose the national average dollar amount for an automobile insurance claim is $890.34. You work for...

Suppose the national average dollar amount for an automobile insurance claim is $890.34. You work for an agency in Michigan and you are interested in whether or not the state average is greater than the national average. The hypotheses for this scenario are as follows: Null Hypothesis: μ ≤ 890.34, Alternative Hypothesis: μ > 890.34. You take a random sample of claims and calculate a p-value of 0.2844 based on the data, what is the appropriate conclusion? Conclude at the 5% level of significance.

Solutions

Expert Solution

orchestra answered 2 years ago
Next > < Previous

Related Solutions

Suppose the national average dollar amount for an automobile insurance claim is $565.412. You work for...
Suppose the national average dollar amount for an automobile insurance claim is $565.412. You work for an agency in Michigan and you are interested in whether or not the state average is less than the national average. The hypotheses for this scenario are as follows: Null Hypothesis: μ ≥ 565.412, Alternative Hypothesis: μ < 565.412. A random sample of 46 claims shows an average amount of $582.985 with a standard deviation of $91.4882. What is the test statistic and p-value...
Suppose that the dollar amount of damage involved in an automobile accident is an exponential random...
Suppose that the dollar amount of damage involved in an automobile accident is an exponential random variable X with mean $1000. (a) What is the probability that the amount of an accident exceeds $400? (b) If the deductible is $400, that means, the insurance company only pays the amount exceeding $400. What is the expected value of the amount that the insurance company pays per accident?
The average annual cost of automobile insurance is $795 (National Association of Insurance Commissioners, 2007). Use...
The average annual cost of automobile insurance is $795 (National Association of Insurance Commissioners, 2007). Use this value as the population mean and assume that the population standard deviation is σ=$100. Consider a sampling distribution with sample size of 50 automobile insurance policies. a. What is the standard error of the mean for the distribution of sample means of insurance costs? b. What is the probability that the sample mean is within $50 (between $745 and $845) of the population...
What dollar amount will Eve recover from the insurance company?
Best Insurance Company provides Eve Erickson with property insurance that contains an 80% coinsurance clause. The coinsurance clause states that if Eve insures the property up to 80% of its value, she will recover any loss up to the face amount of the policy. Eve purchases an $80,000 property insurance policy for property valued at $200,000. Due to a fire, Eve suffers a loss of $10,000.What dollar amount will Eve recover from the insurance company? Explain and show your calculation...
In the automobile insurance industry, deductibles are meant to decrease the moral hazard associated with a claim.
In the automobile insurance industry, deductibles are meant to decrease the moral hazard associated with a claim.TrueFalse
An automobile insurance company predicts that 15% of policy holders file a claim within the next...
An automobile insurance company predicts that 15% of policy holders file a claim within the next year. Since this company has many policy holders, we may assume that filing a claim is independent between policy holders. a. If 15 policy holders are randomly selected, what is the probability that exactly two will file a claim within the next year? What calculator command and inputs did you use? b. If 15 policy holders are randomly selected, what is the probability that...
An automobile insurance company predicts that 15% of policy holders file a claim within the next...
An automobile insurance company predicts that 15% of policy holders file a claim within the next (8pt) year. Since this company has many policy holders, we may assume that filing a claim is independent between policy holders. a. If 15 policy holders are randomly selected, what is the probability that exactly two will file a claim within the next year? What calculator command and inputs did you use?
An insurance company’s database includes a variable, DAMAGE, that records, for each customer claim of automobile...
An insurance company’s database includes a variable, DAMAGE, that records, for each customer claim of automobile damage due to hail, the severity of the damage to the car. DAMAGE is recorded as 1 = minor damage, …, 5 = totaled. One of the following graphs is an appropriate way to display the DAMAGE variable. Which one? a. Time-series plot b. Boxplot c. Pie chart
An insurance company’s database includes a variable, DAMAGE, that records, for each customer claim of automobile...
An insurance company’s database includes a variable, DAMAGE, that records, for each customer claim of automobile damage due to hail, the severity of the damage to the car. DAMAGE is recorded as 1 = minor damage, …, 5 = totaled. Also in the data table is DAY, the day of the week of the hail damage (Monday, Tuesday, …). One of the following graphs is an appropriate way to display the association between DAMAGE and DAY. Which one? a. Cross-tabulation...
An automobile insurance company predicts that 15% of policy holders file a claim within the next...
An automobile insurance company predicts that 15% of policy holders file a claim within the next (8pt) year. Since this company has many policy holders, we may assume that filing a claim is independent between policy holders. a. If 15 policy holders are randomly selected, what is the probability that exactly two will file a claim within the next year? What calculator command and inputs did you use? b. If 15 policy holders are randomly selected, what is the probability...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT