Assuming that the standard deviation of claims is 500 and

Reference no: EM13609452

An insurance company is reviewing its current policy rates. When originally setting the rates they believed that the average claim amount was $1,800. They are concerned that the true mean is actually higher than this, because they could potentially lose a lot of money. They randomly select 40 claims, and calculate a sample mean of $1,950. Assuming that the standard deviation of claims is $500, and set ? =0.05, test to see if the insurance company should be concerned. (One-tailed test)

a. State Null hypothesis

b. State Alternate hypothesis

c. What is the calculated value of t?

d. Determine the t-critical

e. Draw a conclusion

Reference no: EM13609452

Questions Cloud

The filter passes all wavelengths between 600 and 1000 nm : a photocell is composed of germaniumand it is exposed to filtered solar radiation. the filter passes all wavelengths

A company is considering purchasing a machine for 21000 : a company is considering purchasing a machine for 21000. the machine will generate and after-tax net income of 2000 per

Earths atmosphere is constantly bombarded by cosmic ray : earths atmosphere is constantly bombarded by cosmic ray protons that originate somewhere in space. if the protons all

Fireout inc manufactures steel cylinders and nozzles for : fireout inc. manufactures steel cylinders and nozzles for two models of fire extinguishers 1 a home fire extinguisher

Assuming that the standard deviation of claims is 500 and : an insurance company is reviewing its current policy rates. when originally setting the rates they believed that the

A if the radius of the gaussian surface were doubled how : a point charge causes an electric flux of -390nmiddotm2c to pass through a spherical gaussian surface of 25.0 cm radius

What does the term account mean what are the different : what does the term account mean? what are the different classifications of accounts? how do the rules for debits and

A national grocers magazine reports the typical shopper : a national grocers magazine reports the typical shopper spends six minutes in line waiting to check out. a sample of 16

A department store apportions payroll costs on the basis of : a department store apportions payroll costs on the basis of the number of payroll checks issued. accounting costs are

User Account

All Pages