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What Type of Probability Distribution Will the Consulting Firm Most

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What type of probability distribution will the consulting firm most likely employ to analyze the insurance claims in the following problem? An insurance company has called a consulting firm to determine if the company has an unusually high number of false insurance claims. It is known that the industry proportion for false claims is 3%. The consulting firm has decided to randomly and independently sample 100 of the company's insurance claims. They believe the number of these 100 that are false will yield the information the company desires.


Definitions:

Reject

In statistical analysis, to refuse the null hypothesis based on the evidence provided by the test statistic.

Type I Error

The error made when a true null hypothesis is incorrectly rejected.

Correct Decision

An accurate conclusion or choice made based on statistical analysis or reasoning.

P-value

A measure in statistics that helps you determine the significance of your results, indicating the probability of observing your data or something more extreme if the null hypothesis is true.

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