Consider the Following to Answer the Question(s) Below

question 11

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.

-At α = 0.05,

• A) we reject the null hypothesis.
• B) ABI Insurance should increase their premiums because there is evidence indicating an increase in average life expectancy.
• C) we fail to reject the alternative hypothesis HA : µ > 77.
• D) we fail to reject the null hypothesis, and ABI Insurance should not increase their premiums because there is no evidence indicating an increase in average life expectancy.
• E) we support the alternative hypothesis HA : µ > 77. ABI Insurance should increase their premiums.

---

Definitions:

Oklahoma

A state located in the south-central region of the United States.

Whig Party

A political party in the United States (1834–1856) that opposed the policies of President Andrew Jackson and the Democrats.

Democratic Party

One of the two major contemporary political parties in the United States, historically associated with progressive policies and social liberalism.