Consider the Following to Answer the Question(s) Below

question 35

Essay

Consider the following to answer the question(s) below:
Insurance companies track life expectancy information to assist in determining the cost of life insurance policies. Last year the average life expectancy of all policyholders was 77 years. ABI Insurance wants to determine if their clients now have a longer life expectancy, on average, so they randomly sample some of their recently paid policies. The insurance company will only change their premium structure if there is evidence that people who buy their policies are living longer than before. The sample has a mean of 78.6 years and a standard deviation of 4.48 years.

-In this context, describe the Type I error possible. How might such an error impact ABI Insurance?

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Definitions:

Latent Content

The hidden psychological meaning of dreams or other expressions, as opposed to their literal content.

Wishes and Desires

Internal drives or motivations aimed at obtaining satisfaction, pleasure, or the fulfillment of something wanted or sought after.

Forebrain

The anterior part of the brain, including the cerebrum and diencephalon, responsible for processing sensory information and controlling complex behaviors.

Thought and Memory

The cognitive activities involved in processing, storing, and recalling information, playing a crucial role in learning and decision-making.