After seeing countless commercials claiming one can get cheaper car insurance from an online company, a local
Question:
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His statistical software produced the following summaries (where PriceDiff = Local - Online):
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At first, the insurance agent wondered whether there was some kind of mistake in this output. He thought the Pythagorean Theorem of Statistics should work for finding the standard deviation of the price differences€”in other words, that SD(Local €“ Online) = ˆšSD2(Local) + SD2(Online).
But when he checked, he found that ˆš(229.2812) + (256.2672)2 = 343.864,not 175.663 as given by the software. Tell him where his mistake is.
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Related Book For 
Business Statistics
ISBN: 9780321925831
3rd Edition
Authors: Norean Sharpe, Richard Veaux, Paul Velleman
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