Consider the Following to Answer the Question(s) Below

question 5

Multiple Choice

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.

-The correct null and alternative hypotheses are

• A) H0 : µ = 77 and HA : µ > 77.
• B) H0 : µ = 77 and HA : µ < 77.
• C) H0 : µ = 77 and HA : µ ≠ 77.
• D) H0 : µ ≠ 77 and HA : µ = 77.
• E) H0 : µ > 77 and HA : µ = 77

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Definitions:

Gross Margin

Gross Margin is the difference between revenue and the cost of goods sold, divided by revenue, expressed as a percentage. It indicates the percentage of revenue that exceeds the cost of goods sold.

Special Order

A special order refers to a one-time order that is not part of the regular, ongoing business operations and usually requires consideration of additional costs and pricing.

Capacity

The maximum level of output that a company can sustain to make a product or provide a service.

Sales Price

The amount of money charged for a product or service, which can vary based on demand, market conditions, and production costs.