Following the question 1 in this link httpswwwcheggcomhomewo

Following the question 1 in this link:

https://www.chegg.com/homework-help/questions-and-answers/bast-three-years-insurance-company-stated-average-claim-amount-2000-population-standard-de-q7903033

Using the information from question 1, now assume the manager wants to know if there has been an increase in the claim amount.

a) State the hypotheses:

b) Is it a one or two tail test?

c) What test statistic will you use? Explain why?

d) State your decision rule. Show the rejection region in a diagram.

e) Formulate your decision AND interpret the results.

Solution

A H0: x bar =2000 Ha: x bar not equals 2000 B (Two tailed test) C n>30 55 Populatin std dev is known z statistic will be used Mean diff 500 std error 6.741999 z statistic will be used 74.16 p value 0 D p <0.05 Reject null hypothesis E The sample mean is different from 2000 and the mean should be updated.