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Name: An auto insurance company suspect that recently the average cost of ve
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Description: An auto insurance company suspect that recently the average cost of vehicle repairs per accident has increased from the average past cost of $3,800. A sample of 20 accident cases yielded sample mean cost of $4,065 and st. dev of $214. Test the hypoth

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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An auto insurance company suspect that recently the average cost of vehicle repairs per accident has increased from the average past cost of $3,800. A sample of 20 accident cases yielded sample mean cost of $4,065 and st. dev of $214. Test the hypothesis to confirm the suspicion at Assume that the repairing cost follows normal distribution.

(a) Solve the problem using classical approach. You must state the null and the alternative hypotheses.

(b) Solve the problem using p-value approach.

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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