Question

Automobile collision insurance is used to pay for any claims made against the driver in the event of an accident. This type of insurance will typically pay to repair any assets that your vehicle damages. (a) Collision claims tend to be skewed right. Why do you think this is the case? A. Most claims are moderate with similar numbers of low-value and high-value claims. B. Most claims are moderate, but there are some claims that are much higher than the average. C. Most claims are either low value or high value, with not many claims for moderate values. D. Most claims are high, but there are some claims that are much lower than the average. (b) A random sample of 40 collision claims of 30- to 59-year-old drivers results in a mean claim of $3676 with a standard deviation of $2072. An independent random sample of 40 collision claims of 20- to 24-year-old drivers results in a mean claim of $4528 with a standard deviation of $2272. Using the concept of hypothesis testing, determine if higher insurance premiums should be paid by 20- to 24-year-old drivers at the 0.05 level of significance. State the appropriate conclusion. The given situation is about collision claims for 30- to 59-year-old drivers and collision claims for 20- to 24-year-old drivers. Let population 1 be all collision claims of 30- to 59-year-old drivers and let population 2 be all collision claims of 20- to 24-year-old drivers. Write the hypotheses for the test. H0: ?1 = ?2 HA: ?1 < ?2 Calculate the test statistic: Test statistic = -1.75 (Round to two decimal places as needed.)

Automobile collision insurance is used to pay for any claims made against the driver in the event of an accident. This type of insurance will typically pay to repair any assets that your vehicle damages.

(a) Collision claims tend to be skewed right. Why do you think this is the case?
A. Most claims are moderate with similar numbers of low-value and high-value claims.
B. Most claims are moderate, but there are some claims that are much higher than the average.
C. Most claims are either low value or high value, with not many claims for moderate values.
D. Most claims are high, but there are some claims that are much lower than the average.

(b) A random sample of 40 collision claims of 30- to 59-year-old drivers results in a mean claim of $3676 with a standard deviation of $2072. An independent random sample of 40 collision claims of 20- to 24-year-old drivers results in a mean claim of $4528 with a standard deviation of $2272. Using the concept of hypothesis testing, determine if higher insurance premiums should be paid by 20- to 24-year-old drivers at the 0.05 level of significance. State the appropriate conclusion.

The given situation is about collision claims for 30- to 59-year-old drivers and collision claims for 20- to 24-year-old drivers.

Let population 1 be all collision claims of 30- to 59-year-old drivers and let population 2 be all collision claims of 20- to 24-year-old drivers. Write the hypotheses for the test.
H0: ?1 = ?2
HA: ?1 < ?2

Calculate the test statistic:
Test statistic = -1.75 (Round to two decimal places as needed.)

Automobile collision insurance is used to pay for any claims made against the driver in the event of an accident. This type of insurance will typically pay to repair any assets that your vehicle damages.

(a) Collision claims tend to be skewed right. Why do you think this is the case?
A. Most claims are moderate with similar numbers of low-value and high-value claims.
B. Most claims are moderate, but there are some claims that are much higher than the average.
C. Most claims are either low value or high value, with not many claims for moderate values.
D. Most claims are high, but there are some claims that are much lower than the average.

(b) A random sample of 40 collision claims of 30- to 59-year-old drivers results in a mean claim of 3676 with a standard deviation of2072. An independent random sample of 40 collision claims of 20- to 24-year-old drivers results in a mean claim of 4528 with a standard deviation of2272. Using the concept of hypothesis testing, determine if higher insurance premiums should be paid by 20- to 24-year-old drivers at the 0.05 level of significance. State the appropriate conclusion.

The given situation is about collision claims for 30- to 59-year-old drivers and collision claims for 20- to 24-year-old drivers.

Let population 1 be all collision claims of 30- to 59-year-old drivers and let population 2 be all collision claims of 20- to 24-year-old drivers. Write the hypotheses for the test.
H0: ?1 = ?2
HA: ?1 < ?2

Calculate the test statistic:
Test statistic = -1.75 (Round to two decimal places as needed.)

Added by Sharon S.

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