The Manager of an Insurance Company Wants to Prove That

question 61

Essay

The manager of an insurance company wants to prove that the true average claim is actually higher than $1,800 originally set by the company. He randomly selected 40 claims and determined a sample mean of $1,950. Test the appropriate hypotheses at ? = 0.05 to determine if the insurance company should be concerned. Assume that the standard deviation of claims is $500.

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Definitions:

Vas Deferens

The excretory duct of the testes.

Electrocautery

A surgical technique using electrical current to burn and seal tissue, aiding in cutting, removing, or stopping bleeding.

Clamping

The act of using a device to hold or secure objects tightly together to prevent motion or separation.

Vasectomy

A surgical procedure performed on males for permanent contraception, by cutting and sealing the tubes that carry sperm.