Question

Unit 1-3 Discussion:

Please answer one or more of the following questions.

1) For what data in your professional or personal life would it be useful to construct a frequency table or histogram? If you give this some thought, you should be able to identify several sets of data.

2) After using the formula for determining the value of P₁₆ (the 16th percentile) in a data set, the result is L = 5 (this whole number was obtained without rounding). How do we use this result to determine the value of P₁₆?

3) It is common for car insurance companies to charge higher premiums for younger drivers. Younger drivers tend to earn less income than older drivers on average. So why are younger drivers expected to pay higher premiums? Do insurance companies have a right to charge different premiums to different customers for the same coverage based on their age?

Answer 1

2)

z=(x-mu)/sd
z(0.90)=+1.28; because the top 10% occurs at the 90th percentile for z.
1.28=(x-73)/5
5*(1.28)=x-mu
6.4=x-mu

x=79.4
The 16th percentile occurs when z=-0.994
-0.994=(x-mu)/5
-5=x-mu
mu-5=x
x=68

3) THE YOUNGER DRIVERS ARE CHARGED HIGHER FOR THE INSURANCE PREMIUM BECAUSE OF THEIR LACK OF EXPERIENCE IN DRIVING DUE TO WHICH THEIR CHANCES PR PROBABILITY ID HIGHER TO HAVE AN ACCIDENT THEN THE OLDER DRIVERS. YES THE INSURANCE COMPANY HAS FULL RIGHT TO CHARGE DIFFERENT PREMIUMS FOR DIFFERT CUSTOMERS ACCORDING TO THEIR AGE, AS IN THIS CASE LESS THE AGE HIGHER IS THE RISK FOR THE INSURANCE COMPANY