An insurance company is reviewing its current policy rates. When originally setting the rates they believed that the average claim amount was $1,800. They are concerned that the true mean is actually higher than this, because they could potentially lose a lot of money. d) Suppose they randomly select 40 claims, and calculate a sample mean of $1,950. Assuming that the population standard deviation of claims is $500, and set significance level= .05, and test to see if the insurance company should be concerned. What would the p-value be?(Show your work.) e) Given an interpretation of what the p-value means in the context of the problem. f) If significance level= 0.05, state a conclusion.
1) An insurance company is reviewing its current policy rates. When originally setting the rates they believed that the average claim amount was $1,800. They are concerned that the true mean is actually higher than this, because they could potentially lose a lot of money.
d) Suppose they randomly select 40 claims, and calculate a sample mean of $1,950. Assuming that the population standard deviation of claims is $500, and set significance level= .05, and test to see if the insurance company should be concerned. What would the p-value be?(Show your work.)
e) Given an interpretation of what the p-value means in the context of the problem.
f) If significance level= 0.05, state a conclusion.
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