Chapter 25, Problem 9E

To determine

To find out his mistake that he had made in this case.

Answer to Problem 9E

The variables are not independent.

Explanation of Solution

In the question after seeing countless commercials claiming one can get cheaper car insurance from an online company, so he investigated the case and randomly selected profiles for ten of his clients and check the online quotes for their policies. Then he found out that there is some kind of mistakes in the result given by the software. But his mistake was that he use the property of variance but to use the property that the variance of a difference is equal to the sum of the variances, we require that the variables are independent. However the variables are not independent, because they are data about the same cars. Thus, there was this mistake that he incurred.