Question
A company offers medical insurance to its employees. A recent study by the HR manager shows the annual medical cost incurred by employees is normally
A company offers medical insurance to its employees. A recent study by the HR manager shows the annual medical cost incurred by employees is normally distributed with a mean of $1,280 and a standard deviation of $420. The HR manager is concerned over the increasing cost of medical insurance to the company in recent years. Only for part d, it will require a diagram. Thank you.
(a) State the variance and how the normal curve will change when the mean increases and the standard deviation increases.
(b) Calculate, with the help of a diagram, the percentage of the employees who incurred more than $1,500 in annual medical cost.
(c) Calculate, with the help of a diagram, the amount for the top and bottom kth percentage of the population, where k is your register number in your class register.
(d) The following probability statement describes the annual medical cost incurred by employees. Calculate the value of C with the help of a diagram. P ( $1,000 < annual medical cost < C )=0.5
Step by Step Solution
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Step: 1
a The variance is a measure of the spread or dispersion of a distribution It is equal to the square of the standard deviation When the mean increases ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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