Question
In: Statistics and Probability
An insurance company is reviewing its current policy rates. When originally setting the rates, they believed that the average claim amount was $1,500
An insurance company is reviewing its current policy rates. When originally setting the rates, they believed that the average claim amount was $1,500. They are concerned that the true mean is actually higher than this, because they could potentially lose a lot of money. The company is interested in making an inference about the population mean as follows:
Null hypothesis: the true mean is _____ higher than $1,500.
Alternative hypothesis: the true mean is _____ higher than $1,500.a. Actually, not actually.
b. Not actually, actually.
c. Neither A or B.
Solutions
Expert Solution
Option B is correct.
Null Hypothesis 
Alternate Hypothesis 
* In Hypothesis Testing we make a tentative assumption about population parameter. This assumption expressed as statement is called Null Hypothesis (H0).
* We then define an opposite statement called Alternate Hypothesis(Ha).
orchestra answered 2 years agoRelated Solutions
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