1 Voter registration records show that 68 of all voters in I

1) Voter registration records show that 68% of all voters in Indianapolis are registered as Republicans. To test a random digit dialing device, you use a device to call 150 randomly chosen residential telephones in Indianapolis. Of the registered voters contacted, 73% are registered as Republicans. i) Is 68% a parameter or a statistic? ii) Is 73% a parameter or a statistic? 2) Suppose that the mean loss from a fire in a year is $250 a year. (Most of us have no lots, but a few lose their homes. The $250 is the average loss.) An insurance company plans to sell fire insurance for $250 plus enough to cover costs and profit. Explain clearly why it would be unwise to sell only 12 policies. Then explain why selling thousands of such policies is safe business.

Solution

1) i) AS IT IS GIVEN THAT 68% OF VOTERS IN INDIANAPOLIS ARE REGISTERED AS REPUBLICANS WHICH MEANS THAT IT IS A PARAMETER GIVEN IN THE QUESTION

ii) ON CHOOSING RANDOM POPULATION IT IS OBSERVED THAT 73% ARE REGISTERED AS A REPUBLICANS THIS MEANS 73% IS A STATISTIC.