The claims department at Wise Insurance Company believes that younger drivers have more accidents and, therefore, should be charged higher insurance rates. Investigating a sample of 1,200 Wise policyholders revealed the following breakdown on whether a claim had been filed in the last 3 years and the age of the policyholder. H0: Whether a claim is filed and age is not related. H1: Whether a claim is filed and age is related. Reject H0 if X2 >_____ Compute the value of chi-square. X2 = _____ At the .05 significance level, is it reasonable to conclude that there is a relationship between the age of the policyholder and whether or not the person filed a claim? (Reject/Do not Reject) H0. Age is (not related/ related) to a claim being filed.
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
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The claims department at Wise Insurance Company believes that younger drivers have more accidents and, therefore, should be charged higher insurance rates. Investigating a sample of 1,200 Wise policyholders revealed the following breakdown on whether a claim had been filed in the last 3 years and the age of the policyholder. |
| H0: | Whether a claim is filed and age is not related. |
| H1: | Whether a claim is filed and age is related. |
| Reject H0 if X2 >_____ |
| Compute the value of chi-square. |
| X2 = _____ |
|
At the .05 significance level, is it reasonable to conclude that there is a relationship between the age of the policyholder and whether or not the person filed a claim? |
| (Reject/Do not Reject) H0. Age is (not related/ related) to a claim being filed. |
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