You are investigating insurance fraud that manifests itself through claimants who file claims with respect to auto accidents with which they were not involved. Your evidence consists of a distribution of the observed number of claimants per accident and a standard distribution for accidents on which fraud is known to be absent. The two distributions are summarized below: Number of Claimants Observed Number of Standard Probability per Accident 1 Accidents 0.25 235 335 250 2 .35 3 .24 4 .11 111 .04 47 6+ .01 22 Total 1.00 1000 Determine the result of a chi-square test of the null hypothesis that there is no fraud in the observed accidents.

A First Course in Probability (10th Edition)
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You are investigating insurance fraud that manifests itself through claimants who file claims
with respect to auto accidents with which they were not involved. Your evidence consists of a
distribution of the observed number of claimants per accident and a standard distribution for
accidents on which fraud is known to be absent. The two distributions are summarized below:
Number of Claimants
Observed Number of
Standard Probability
per Accident
1
Accidents
0.25
235
2
.35
335
3
.24
250
4
.11
111
5
.04
47
6+
.01
22
Total
1.00
1000
Determine the result of a chi-square test of the null hypothesis that there is no fraud in the
observed accidents.
Transcribed Image Text:You are investigating insurance fraud that manifests itself through claimants who file claims with respect to auto accidents with which they were not involved. Your evidence consists of a distribution of the observed number of claimants per accident and a standard distribution for accidents on which fraud is known to be absent. The two distributions are summarized below: Number of Claimants Observed Number of Standard Probability per Accident 1 Accidents 0.25 235 2 .35 335 3 .24 250 4 .11 111 5 .04 47 6+ .01 22 Total 1.00 1000 Determine the result of a chi-square test of the null hypothesis that there is no fraud in the observed accidents.
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