Answered: The “Pro-Wealth” insurance wants to…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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The “Pro-Wealth” insurance wants to calculate the difference between the average amount of term life insurance purchased per family and the average amount of life time insurance purchased per family. To obtain this data, one of the company's actuaries randomly selects 25 families who have term life insurance only and 27 families who have life time insurance only. Each sample was taken from families where the head was less than 45 years old. Use the data obtained with a confidence level of: 96%, to estimate the difference in the mean between the two groups, assuming the amount of insurance is normally distributed. For term insurance (term): xT = $ 76,000 sT = $ 22,500 and nT = 25 , while for whole life insurance: xT = $ 46,000 sT = $ 15,600 and nT = 27.

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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