Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Insurance companies track life expectancy information to assist in determining the cost of life insurance policies.The insurance company knows that, last year, the life expectancy

Insurance companies track life expectancy information to assist in determining the cost of life insurance policies.The insurance company knows that, last year, the life expectancy of its policy holders was 77 years.They want to know if their clients this year have a longer life expectancy, on average, so the company randomly samples some of the recently paid policies to see if the mean life expectancy of policy holders has increased.The insurance company will only change their premium structure if there is evidence that people who buy their policies are living longer than before.The attached excel spreadsheet contains age of death of a sample of policy holders.

a)(6 points)To begin to answer this question, we will use a confidence interval.Find and interpret a 90% confidence interval for the mean life expectancy of these policy holders.Be sure to check the conditions required for this interval.

Using your confidence interval, what can you conclude about the average life expectancy?Do we have evidence that it is increasing?

Your work on part (a) depends on a sampling distribution model.Describe the center, shape, and spread of this model.

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

Partial Differential Equations With Fourier Series And Boundary Value Problems

Authors: Nakhle H Asmar

1st Edition

0486820831, 9780486820835

More Books

Students also viewed these Mathematics questions

Question

Am I trying to change or control others?

Answered: 1 week ago