What is the probability of committing a type ii error

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Life insurance experts have been claiming that the aver- age worker in the city of Cincinnati has no more than $25,000 of personal life insurance. An insurance researcher believes that this is not true and sets out to prove that the average worker in Cincinnati has more than $25,000 of personal life insurance. To test this claim, she randomly samples 100 workers in Cincinnati and inter- views them about their personal life insurance coverage. She discovers that the average amount of personal life insurance coverage for this sample group is $26,650. The population standard deviation is $12,000.

Determine whether the test shows enough evidence to reject the null hypothesis posed by the salesperson. Assume the probability of committing a Type I error is .05.

If the actual average for this population is $30,000, what is the probability of committing a Type II error?

Reference no: EM131017079

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