If You Live in California,the Decision to Buy Earthquake Insurance

question 77

Short Answer

If you live in California,the decision to buy earthquake insurance is an important one.A survey revealed that only 133 of 337 randomly selected residences in one California county were protected by earthquake insurance.Calculate the appropriate test statistic to test the claim that less than 40 percent of the residents in the county are protected by earthquake insurance.

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Definitions:

Price Appreciation

The increase in the value of an asset or investment over time, not accounting for dividends or interest earned.

Ceteris Paribus

A Latin phrase meaning "all other things being equal," used in economics to isolate the effect of one variable by holding others constant.

Yield

The income return on an investment, such as the interest or dividends received, expressed as a percentage of the investment's cost.

Bond

A fixed-income instrument that represents a loan made by an investor to a borrower, typically corporate or governmental, which pays periodic interest and the return of the principal at maturity.