A Car Insurance Company Would Like to Determine the Proportion

question 61

Multiple Choice

A car insurance company would like to determine the proportion of accident claims covered by the company.According to a preliminary estimate,60 percent of the claims are covered.How large a sample should be taken to estimate the proportion of accident claims covered by the company if we want to be 98 percent confident that the sample percentage is within ±3 percent of the actual percentage of the accidents covered by the insurance company?

• A) 348
• B) 1508
• C) 1887
• D) 1442

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Definitions:

Income

Money received, especially on a regular basis, for work, through investments, or from any other source, used to acquire goods and services.

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a given price over a specific period.

Demand

The inclination and capability of buyers to acquire products and services at specified prices.

Increase

An upward movement in quantity, size, number, value, or intensity of a particular variable.