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An insurance industry report indicated that 40 percent of those persons involved in minor traffic accidents this year have been involved in at least one other traffic accident in the last five years. An advisory group decided to investigate this claim, believing it was too large. A sample of 200 traffic accidents this year showed 74 persons were also involved in another accident within the last five years. Use the .01 significance level.
a. Can we use z as the test statistic? Tell why or why not.
b. State the null hypothesis and the alternate hypothesis.
Use this information to construct a probability table, and then calculate each of the following probabilities:
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