Explanation Given info: The data shows the claims paid by the two insurance companies. Calculation: State the null and alternative hypothesis. Null hypothesis: H 0 : There is no significant difference between the two companies. Alternative hypothesis: H 1 : There is significant difference between the two companies Critical value: From the table of “critical values for Wilcoxon rank sum test” at α = 0.05 , the critical values are − z 0 = − 1.96 and z 0 = 1.96 . The rejection region for the two-tailed test is z < − 1.96 and z > 1.96 . Determine the sample size : The sample size for company A is 12. The sample size for company B is 12. The table shows the combined order of the companies listed in ascending order: Ordered data Sample Rank 1.7 B 1 1.8 B 2 2.2 B 3 2.5 A 4 3.0 A 5.5 3.0 B 5.5 3.4 B 7 3.9 A 8 4.1 B 9 4.4 B 10 4.5 A 11 4.7 B 12 5.3 B 13 5.6 B 14 5.8 A 15 6.0 A 16 6.2 A 17 6.3 A 18 6.5 A 19 7.3 B 20 7.4 A 21 9.9 A 22 10.6 A 23 10.8 B 24 Test statistic: Condition: For two independent samples, the test statistic z for the Wilcoxon rank sum test is z = R − μ R σ R Where, R is the sum of the ranks for smaller sample, μ R = n 1 ( n 1 + n 2 + 1 ) 2 and σ R = n 1 n 2 ( n 1 + n 2 + 1 ) 12

Elementary Statistics Plus MyLab Statistics with Pearson eText -- Access Card Package (7th Edition) (What's New in Statistics)

7th Edition

ISBN: 9780134684901

Author: Ron Larson, Betsy Farber

Publisher: PEARSON

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Chapter 11.2, Problem 2TY

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To test: The claim that there is a difference in the claims paid by the two companies at 5% level of significance.

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Chapter 11.2, Problem 1TY

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Chapter 11 Solutions

Elementary Statistics Plus MyLab Statistics with Pearson eText -- Access Card Package (7th Edition) (What's New in Statistics)

Ch. 11.1 - A real estate agency claims that the median number...Ch. 11.1 - An organization claims that the median age of...Ch. 11.1 - A medical researcher claims that a new vaccine...Ch. 11.1 - Prob. 1E Ch. 11.1 - When the sign test is used, what population...Ch. 11.1 - Describe the test statistic for the sign test when...Ch. 11.1 - In your own words, explain why the hypothesis test...Ch. 11.1 - Explain how to use the sign test to test a...Ch. 11.1 - List the two conditions that must be met in order...Ch. 11.1 - Performing a Sign Test In Exercises 722, (a)...

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To test: The claim that there is a difference in the claims paid by the two companies at 5% level of significance.

Solution Summary: The author states the null and alternative hypothesis that there is no significant difference between the two insurance companies.

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To test: The claim that there is a difference in the claims paid by the two companies at 5% level of significance.

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