In the claims department of an insurance office various quantities are computed at the end of each day’s business. On Monday, 20 claims are received for a particular class of policy. The mean claim amount is calculated to be K4,500 and the standard deviation to be K2,540. On Tuesday, the claims are reviewed and one claim which was incorrectly recorded as K13,000 is now corrected to K3,000. Determine the mean and standard deviation of the corrected set of claims.
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
In the claims department of an insurance office various quantities are computed at the end of each day’s business. On Monday, 20 claims are received for a particular class of policy. The mean claim amount is calculated to be K4,500 and the standard deviation to be K2,540. On Tuesday, the claims are reviewed and one claim which was incorrectly recorded as K13,000 is now corrected to K3,000.
Determine the mean and standard deviation of the corrected set of claims.
Step by step
Solved in 3 steps
