Question

In: Statistics and Probability

Policy Holder # Life Expectancy at 65 1 20.4 2 22.2 3 17.6 4 27.2 5...

Policy Holder # Life Expectancy at 65
1 20.4
2 22.2
3 17.6
4 27.2
5 24.5
6 20.3
7 21.3
8 22.5
9 26.7
10 18.3
11 23.5
12 25.6
13 22.1
14 24.2
15 15.4
16 23.4
17 25.3
18 18.5
19 24.2
20 20.3
21 26.8
22 28.1
23 19.9
24 25.5
25 22.3
26 23.9
27 31.7
28 26.0
29 22.8
30 23.3
31 25.9
32 17.7
33 19.6
34 21.8
35 23.3
36 21.9
37 21.9
38 28.7
39 19.9
40 27.8
41 26.6
42 21.1
43 23.3
44 25.5
45 23.8
46 21.4
47 23.3
48 23.6
49 23.1
50 23.9

1. Insurance companies track life expectancy information to assist in determining the cost of life insurance policies. Life expectancy is a statistical measure of average time a person is expected to live, based on a number of demographic factors. Mathematically, life expectancy is the mean number of years of life remaining at a given age, assuming age-specific mortality rates remain at their most recently measured levels. Last year the average life expectancy of all the Life Insurance policyholders in Ontario at age 65 was 22.3 years (meaning that a person reaching 65 last year was expected to live, on average, until 87.3). The insurance company wants to determine if their clients now have a longer average life expectancy, so they randomly sample some of their recently paid policies. The insurance company will only change their premium structure if there is evidence that people who buy their policies are living longer than before. The sample data is provided in the excel file. Answer the following questions. Results should be support by excel output.

a. Construct a 95% and 99% confidence intervals for the true average life expectancy. Use t-distribution and Descriptive Statistics function from Data Analysis. Interpret each Confidence interval and comment on the difference between the 95% and 99% interval.

b. Write the null and alternative hypotheses for this test:

c. In this context, describe a Type I error possible. How might such an error impact Life Insurance company’s decision regarding the premium structure?

d. What is the value of the t-test statistic?

e. What is the associated P-value?

f. State the conclusion using α = 0.05. Do it using both P-value and critical value.

Please answer it on excel. Thank you.

Solutions

Expert Solution


Related Solutions

Policy Holder # Life Expectancy at 65 1 20.4 2 22.2 3 17.6 4 27.2 5...
Policy Holder # Life Expectancy at 65 1 20.4 2 22.2 3 17.6 4 27.2 5 24.5 6 20.3 7 21.3 8 22.5 9 26.7 10 18.3 11 23.5 12 25.6 13 22.1 14 24.2 15 15.4 16 23.4 17 25.3 18 18.5 19 24.2 20 20.3 21 26.8 22 28.1 23 19.9 24 25.5 25 22.3 26 23.9 27 31.7 28 26.0 29 22.8 30 23.3 31 25.9 32 17.7 33 19.6 34 21.8 35 23.3 36 21.9 37...
4. (a) Suppose that τσ=(1 5 2 3)(4) and στ=(1 2 4 5)(3) in S5. If...
4. (a) Suppose that τσ=(1 5 2 3)(4) and στ=(1 2 4 5)(3) in S5. If σ1 = 2, find σ and τ. (b) In Sn, show that σ = τ if and only if σ(τ)^(−1) = ε. ε is the identity permutation. Must be written as a proof. (c) Let σ=(1 2 3) and τ=(1 2) in S3. Show that S3={ε,σ,σ^2,τ,τσ,τ(σ)^2} and that σ^3=ε=τ^2 and στ=τ(σ)^2, then fill out the multiplication table for S3.
coffee tea juice 3 4 5 5 4 3 4 4 4 5 1 2 4...
coffee tea juice 3 4 5 5 4 3 4 4 4 5 1 2 4 2 2 Do a One-way ANOVA by hand (at least once in your life!) …Is there a difference in attention for those who drink coffee, tea, or juice during an 8 a.m. class? Utilize the five steps of hypothesis testing to analyze the following data (p<.01). Attention Ratings (1=no attention- 5=full attention)
Year Salary (A) Salary (B) 1 65 55 2 65 57 3 65 59 4 67...
Year Salary (A) Salary (B) 1 65 55 2 65 57 3 65 59 4 67 62 5 69 64 6 72 67 7 74 69 8 77 72 9 79 75 10 82 78 11 84 81 12 87 84 13 89 88 14 89 91 15 89 95 16 92 95 17 92 95 18 94 95 19 94 95 20 96 99 1. Economics assumes people are interested in their rational self interest. Suppose a person works...
Find the distances: A) Between ?1=〈2+2?,−1+?,−3?〉and ?2=〈4,−5−3?,1+4?〉 . B) Between the planes 2?−?+5?=0 and 2?−?+5?=5 ....
Find the distances: A) Between ?1=〈2+2?,−1+?,−3?〉and ?2=〈4,−5−3?,1+4?〉 . B) Between the planes 2?−?+5?=0 and 2?−?+5?=5 . C) From the point (1,2,3) to the line ?=〈−?,4−?,1+4?〉 .
5 + (3 * 4)^2 - 2 = 147             (5 + 3) * 4^2 -...
5 + (3 * 4)^2 - 2 = 147             (5 + 3) * 4^2 - 2 = 126             (5 + 3 )* (4^2 – 2) = 112             5 + (3 * 4^2) - 2 = 51 Which is the correct answer to using the "order of precedence" and why?
X 1 3 5 3 4 4 Y 2 5 4 3 4 6 A: Plot...
X 1 3 5 3 4 4 Y 2 5 4 3 4 6 A: Plot the date B: find the line of best fit C: determine ŷ AT x=3 D: Find r and r^2 E: explain r and r^2
Raysut Cement Company: Strengths: 1- 2- 3- 4- 5- Weaknesses : 1- 2- 3- 4- 5-...
Raysut Cement Company: Strengths: 1- 2- 3- 4- 5- Weaknesses : 1- 2- 3- 4- 5- Opportunities : 1- 2- 3- 4- 5- Threats: 1- 2- 3- 4- 5-
COLLAPSE Overall Rating: 1 2 3 4 5 1 2 3 4 5 " Service Positioning...
COLLAPSE Overall Rating: 1 2 3 4 5 1 2 3 4 5 " Service Positioning versus Product Process " Please respond to the following: Examine the roles of Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) in business. Determine how each system can play a critical role in managing value chains. How does LaRosa’s Pizzeria use this technology in order to improve the supply chain and value chain operations? Determine the ways this technology has helped to deliver...
[ 1 -1 3 -3 5 2 ] A=[ 1 -1 4 -1 9 -4 ]...
[ 1 -1 3 -3 5 2 ] A=[ 1 -1 4 -1 9 -4 ] [ -1 1 -3 3 -4 8  ] [7] b=[5] [4] use the row reduction algorithm to solve the following Describe the solution set of Ax=b in parametric vector form describe the solution set of Ax=0 as Span[ V1,V2,....,Vp]
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT