Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

After seeing commercials claiming one can get cheaper car insurance online, a local insurance agent was concerned that he might lose customers. To investigate, he

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
After seeing commercials claiming one can get cheaper car insurance online, a local insurance agent was concerned that he might lose customers. To investigate, he randomly selected profiles (type of car, coverage, driving record, etc.) for 10 of his clients and checked online price quotes for their policies. The comparisons are shown in the accompanying table. Also, his statistical software produced the given summaries. At first, the insurance agent wondered whether there was some kind of mistake in this output. He thought the Pythagorean Theorem of Statistics should work for finding the standard deviation of the price differences-in other words, that SD(Local - Online) = , SD"(Local) + SD"(Online) . But when he checked, he found that , (229.281) + (256.267) =343.864, not 175.663 as given by the software. Tell him where his mistake is. Eff Click the icon to view the data table i Click the icon to view the software output. Adding These price quotes are for the same cars, so they are Drivers quoted high insurance premiums by the local company will be likely to get a rate from the online company. requires that the variables be X - X Software output Data table Online PriceDiff Variable Count Mean StdDev Local 568 391 177 Local 10 799.200 229.281 872 602 270 Online 10 753. 300 256.267 451 488 - 37 PriceDiff 10 45 .900 175.663 1229 903 326 605 677 - 72 1021 1270 - 249 783 703 80 844 789 55 907 1008 - 101 Print Done 712 702 10 PriceDiff = Local - Online Print Donerate from the online company. Adding requires that the variables be These price quotes are for the same cars, so they are Drivers quoted high insurance premiums by the local company will be likely to get a medians differences means variancesAdding requires that the variables be These price quotes are for the same cars, so they are Drivers quoted high insurance premiums by the local company will be likely to get a rate from the online company. dependent. independent.Adding requires that the variables be These price quotes are for the same cars, so they are Drivers quoted high insurance premiums by the local company will be likely to get a rate from the online company. paired. independent.Adding requires that the variables be These price quotes are for the same cars, so they are Drivers quoted high insurance premiums by the local company will be likely to get a rate from the online company. low moderate high

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essential Partial Differential Equations Analytical And Computational Aspects

Authors: David F Griffiths, John W Dold, David J Silvester

1st Edition

3319225693, 9783319225692

More Books

Students also viewed these Mathematics questions

Question

Calculate a utility estimate for a target organization

Answered: 1 week ago