2. The accounting at GEICO notices that the average claim might be larger than $1800, which...

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2. The accounting at GEICO notices that the average claim might be larger than $1800, which was previously set as a true average claim amount. If the actual average is higher, the company will be loosing money in the long run. They ran- domly select 45 claims, and calculate a sample mean of $1,920. Suppose that the variance of claims is known to be equal to $1600. (a) Set the significance level to a = 0.05 and use the hypothesis testing to check if the average claim is larger than $1800. (b) Find the probability of Type I error. (c) Find the p-value corresponding to the given sample. 2. The accounting at GEICO notices that the average claim might be larger than $1800, which was previously set as a true average claim amount. If the actual average is higher, the company will be loosing money in the long run. They ran- domly select 45 claims, and calculate a sample mean of $1,920. Suppose that the variance of claims is known to be equal to $1600. (a) Set the significance level to a = 0.05 and use the hypothesis testing to check if the average claim is larger than $1800. (b) Find the probability of Type I error. (c) Find the p-value corresponding to the given sample.

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a To test Test statistic where We reject the null hypothesis or H 0 if t... View the full answer