Suppose for the Coming Year a Family Has Calculated Its

question 145

Multiple Choice

Suppose for the coming year a family has calculated its expected value for car repairs to be $3,000. The family decides to buy a car insurance policy that would cover such claims. This insurance policy would cost a total of $3,000 for the household. This insurance policy is:

• A) overcharging the family and is not fair.
• B) an example of a fair insurance policy.
• C) undercharging the family.
• D) not appropriate for the family, and they should not buy it.

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Definitions:

Power Consumption

The amount of energy consumed by electronic devices or systems over a given period of time.

Type II Error

A statistical error that occurs when a false null hypothesis is not rejected, meaning a real effect or difference was failed to be detected.

Sample Size

The number of observations or data points collected in a sample from a population, used for statistical analysis.

Power of Test

Refers to the probability that the test correctly rejects the null hypothesis when the alternative hypothesis is true.