Question

2. You are given the following: • Claim sizes follow a normal distribution with mean u and variance o2 = 47,300. The hypotheses are: • H, := 10000, • Haip < 10000 • One claim of 9.600 is observed. Determine the test result. Show me the computation process. • Reject H, at the 0.01 significance level. • Reject H, at the 0.02 significance level, but not at the 0.01 level. • Reject H, at the 0.05 significance level, but not at the 0.02 level. • Reject H, at the 0.10 significance level, but not at the 0.05 level. • Do not reject H. at the 0.10 significance level.

Answer 1

Test statistic,
z = (xbar - mu)/(sigma/sqrt(n))
z = (9600 - 10000)/(217.4856/sqrt(1))
z = -1.84

P-value Approach
P-value = 0.0329

Reject H0 at the 0.05 SL, but not at 0.02 Level
Option C