Show transcribed image text 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 wil 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 α = 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.
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 wil 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 α = 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.
