CNNBC recently reported that the mean annual cost of auto insurance is 951 dollars. Assume the standard deviation is 286 dollars, and the cost is normally distributed. You take a simple random sample of 11 auto insurance policies. Round your answers to 4 decimal places. a. What is the distribution of X? X - N( b. What is the distribution of a? - N( c. What is the probability that one randomly selected auto insurance is less than $1018? d. a simple random sample of 11 auto insurance policies, find the probability that the average cost is less than $1018. e. For part d), is the assumption of normal necessary? No Yes Question Help: Message instructor Submit Question
CNNBC recently reported that the mean annual cost of auto insurance is 951 dollars. Assume the standard deviation is 286 dollars, and the cost is normally distributed. You take a simple random sample of 11 auto insurance policies. Round your answers to 4 decimal places. a. What is the distribution of X? X - N( b. What is the distribution of a? - N( c. What is the probability that one randomly selected auto insurance is less than $1018? d. a simple random sample of 11 auto insurance policies, find the probability that the average cost is less than $1018. e. For part d), is the assumption of normal necessary? No Yes Question Help: Message instructor Submit Question
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
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
Transcribed Image Text:**Educational Content: Understanding the Distribution of Auto Insurance Costs**
**Background:**
CNNBC recently reported that the mean annual cost of auto insurance is 951 dollars. We assume the standard deviation is 286 dollars, and the cost is normally distributed. We take a simple random sample of 11 auto insurance policies.
**Objective:**
Round your answers to 4 decimal places.
**Questions:**
a. **Distribution of Individual Policies (X):**
What is the distribution of \( X \)?
- **Solution:** \( X \sim N(\mu, \sigma) \)
- Where \( \mu = 951 \) and \( \sigma = 286 \)
b. **Distribution of the Sample Mean (\(\bar{x}\)):**
What is the distribution of \(\bar{x}\)?
- **Solution:** \(\bar{x} \sim N\left(\mu, \frac{\sigma}{\sqrt{n}}\right)\)
- Where \( n = 11 \)
c. **Probability for a Single Policy:**
What is the probability that one randomly selected auto insurance is less than $1018?
- **Solution:** Enter the probability using appropriate normal distribution calculations.
d. **Probability for Sample Average:**
For a simple random sample of 11 auto insurance policies, find the probability that the average cost is less than $1018.
- **Solution:** Enter the probability using appropriate sampling distribution calculations.
e. **Assumption of Normality:**
For part d), is the assumption of normality necessary?
- **Options:** No/Yes (Select one)
**Additional Resources:**
- For help, you can **Message the instructor**.
- Once you have completed the questions, click **Submit Question** to check your answers.
This exercise helps in understanding the application of normal distribution in real-world scenarios like auto insurance cost estimation.
---
Note: The above exercise is designed for educational purposes to illustrate the principles of statistical distributions and sampling.
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