Statistical Reasoning for Everyday Life Plus MyLab Statistics with Pearson eText -- 18 Week Access Card Package (5th Edition)
5th Edition
ISBN: 9780135990278
Author: Bennett, Jeffrey O., Briggs, William L., Triola, Mario F.
Publisher: PEARSON
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Textbook Question
Chapter 7, Problem 1CRE
Pizza and the Subway. For Exercises 1–6, refer to the following table that lists the cost (in dollars) of a slice of pizza in New York City and the subway fare in the same year.
1. Construct a
Expert Solution & Answer
To determine
Draw a scatter plot.
Explain the result from the scatter plot.
Answer to Problem 1CRE
- The scatter plot is given below:
Explanation of Solution
Calculation:
The costs of a slice of pizza and the subway fares in New York for a year are given.
Best-fit line:
In a scatter plot, the best possible straight line, which is closest to the points is called best-fit line.
Scatter plot with fitted line:
Software procedure:
Step-by-step software procedure to draw scatter plot using EXCEL software is as follows:
- Open an EXCEL file.
- In column A and B, the Pizza cost and Subway fare data were entered.
- Select the data > click on insert.
- Chose X Y (Scatter) from chart.
- Click OK.
- Click on the data points>right click> add trendline.
- Choose linear.
- Click on display equation on chart and display R-squared value on chart.
- Output using EXCEL software is given below:
From the above scatter plot, it can be said that all the points are nearer to the best fitted line.
The coefficient of determination is 98.36%. Thus, 98.36% variability in subway fare can be explained by the pizza cost using the best fitted model.
Hence, it can be said that the fit is very good.
Moreover, it can be said that for increasing pizza cost, the subway fare has also increased and the trend line is an ascending trend line. Therefore, there is a strong positive correlation between the variables.
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Questions
An insurance company's cumulative incurred claims for the last 5 accident years are given
in the following table:
Development Year
Accident Year 0
2018
1 2 3 4
245 267 274 289 292
2019
255 276 288 294
2020
265 283 292
2021
263 278
2022
271
It can be assumed that claims are fully run off after 4 years. The premiums received for
each year are:
Accident Year Premium
2018
306
2019
312
2020
318
2021
326
2022
330
You do not need to make any allowance for inflation.
1. (a) Calculate the reserve at the end of 2022 using the basic chain ladder method.
(b) Calculate the reserve at the end of 2022 using the Bornhuetter-Ferguson method.
2. Comment on the differences in the reserves produced by the methods in Part 1.
Chapter 7 Solutions
Statistical Reasoning for Everyday Life Plus MyLab Statistics with Pearson eText -- 18 Week Access Card Package (5th Edition)
Ch. 7.1 - Correlation. What is a correlation? Give three...Ch. 7.1 - Scatterplot. What is a scatterplot, and how is one...Ch. 7.1 - Types of Correlation. Define and distinguish...Ch. 7.1 - Correlation Coefficient. What does the correlation...Ch. 7.1 - Does It Make Sense? For Exercises 58, determine...Ch. 7.1 - Does It Make Sense? For Exercises 58, determine...Ch. 7.1 - Does It Make Sense? For Exercises 58, determine...Ch. 7.1 - Does It Make Sense? For Exercises 58, determine...Ch. 7.1 - Correlation. Exercises 916 list pairs of...Ch. 7.1 - Correlation. Exercises 916 list pairs of...
Ch. 7.1 - Correlation. Exercises 916 list pairs of...Ch. 7.1 - Correlation. Exercises 916 list pairs of...Ch. 7.1 - Correlation. Exercises 916 list pairs of...Ch. 7.1 - Correlation. Exercises 916 list pairs of...Ch. 7.1 - Correlation. Exercises 916 list pairs of...Ch. 7.1 - Correlation. Exercises 916 list pairs of...Ch. 7.1 - Crickets and Temperature. One classic example of a...Ch. 7.1 - Two-Day Forecast. Figure 7.8 shows a scatterplot...Ch. 7.1 - Properties of the Correlation Coefficient. For...Ch. 7.1 - Properties of the Correlation Coefficient. For...Ch. 7.1 - Properties of the Correlation Coefficient. For...Ch. 7.1 - Properties of the Correlation Coefficient. For...Ch. 7.1 - Scatterplot and Correlation. In Exercises 2330,...Ch. 7.1 - Scatterplot and Correlation. In Exercises 2330,...Ch. 7.1 - Scatterplot and Correlation. In Exercises 2330,...Ch. 7.1 - Prob. 26ECh. 7.1 - Scatterplot and Correlation. In Exercises 2330,...Ch. 7.1 - Scatterplot and Correlation. In Exercises 2330,...Ch. 7.1 - Scatterplot and Correlation. In Exercises 2330,...Ch. 7.1 - Scatterplot and Correlation. In Exercises 2330,...Ch. 7.1 - Your Own Positive Correlations. Give examples of...Ch. 7.1 - Your Own Negative Correlations. Give examples of...Ch. 7.2 - Outliers. Briefly explain how an outlier can make...Ch. 7.2 - Grouped Data. Briefly explain how data that...Ch. 7.2 - Explanations for Correlation. What are the three...Ch. 7.2 - Prob. 4ECh. 7.2 - Does It Make Sense? For Exercises 58, determine...Ch. 7.2 - Does It Make Sense? For Exercises 58, determine...Ch. 7.2 - Does It Make Sense? For Exercises 58, determine...Ch. 7.2 - Does It Make Sense? For Exercises 58, determine...Ch. 7.2 - Correlation and Causality. Exercises 916 present...Ch. 7.2 - Correlation and Causality. Exercises 916 present...Ch. 7.2 - Correlation and Causality. Exercises 916 present...Ch. 7.2 - Correlation and Causality. Exercises 916 present...Ch. 7.2 - Correlation and Causality. Exercises 916 present...Ch. 7.2 - Correlation and Causality. Exercises 916 present...Ch. 7.2 - Correlation and Causality. Exercises 916 present...Ch. 7.2 - Correlation and Causality. Exercises 916 present...Ch. 7.2 - Outlier Effects. Consider the scatterplot in...Ch. 7.2 - Outlier Effects. Consider the scatterplot in...Ch. 7.2 - Footprint and Height. The following table lists...Ch. 7.2 - January and July High Temperatures. The following...Ch. 7.2 - Birth and Death Rates. Figure 7.17 shows the birth...Ch. 7.2 - Penny Weight and Date. The scatterplot in Figure...Ch. 7.3 - Best-Fit Line. What is a best-fit line? How is a...Ch. 7.3 - Prob. 2ECh. 7.3 - Interpreting r2. What does the square of the...Ch. 7.3 - Prob. 4ECh. 7.3 - Prob. 5ECh. 7.3 - Does It Make Sense? For Exercises 58, determine...Ch. 7.3 - Does It Make Sense? For Exercises 58, determine...Ch. 7.3 - Does It Make Sense? For Exercises 58, determine...Ch. 7.3 - Best-Fit Lines. Exercises 916 refer to tables in...Ch. 7.3 - Best-Fit Lines. Exercises 916 refer to tables in...Ch. 7.3 - Prob. 11ECh. 7.3 - Best-Fit Lines. Exercises 916 refer to tables in...Ch. 7.3 - Best-Fit Lines. Exercises 916 refer to tables in...Ch. 7.3 - Best-Fit Lines. Exercises 916 refer to tables in...Ch. 7.3 - Prob. 15ECh. 7.3 - Prob. 16ECh. 7.4 - Correlation and Causality. What is the difference...Ch. 7.4 - Prob. 2ECh. 7.4 - Establishing Causality. Briefly state in your own...Ch. 7.4 - Confidence in Causality. Describe three levels of...Ch. 7.4 - Prob. 5ECh. 7.4 - Does It Make Sense? For Exercises 58, determine...Ch. 7.4 - Does It Make Sense? For Exercises 58, determine...Ch. 7.4 - Does It Make Sense? For Exercises 58, determine...Ch. 7.4 - Physical Models. For Exercises 912, determine...Ch. 7.4 - Physical Models. For Exercises 912, determine...Ch. 7.4 - Physical Models. For Exercises 912, determine...Ch. 7.4 - Physical Models. For Exercises 912, determine...Ch. 7.4 - Altitude and Health. When some people climb to...Ch. 7.4 - Smoking and Lung Cancer. There is a strong...Ch. 7.4 - Other Lung Cancer Causes. Several things besides...Ch. 7.4 - Longevity of Orchestra Conductors. A famous study...Ch. 7.4 - Older Moms. A study reported in Nature claims that...Ch. 7.4 - High-Voltage Power Lines. Suppose that people...Ch. 7.4 - Gun Control. Those who favor gun control often...Ch. 7.4 - Vasectomies and Prostate Cancer. The article Does...Ch. 7 - Pizza and the Subway. For Exercises 16, refer to...Ch. 7 - Pizza and the Subway. For Exercises 16, refer to...Ch. 7 - Pizza and the Subway. For Exercises 16, refer to...Ch. 7 - Pizza and the Subway. For Exercises 16, refer to...Ch. 7 - Pizza and the Subway. For Exercises 16, refer to...Ch. 7 - Pizza and the Subway. For Exercises 16, refer to...Ch. 7 - For 10 pairs of sample data values, the...Ch. 7 - In a study involving randomly selected subjects,...Ch. 7 - A researcher collects paired sample data values...Ch. 7 - Estimate the value of the linear correlation...Ch. 7 - Fill in the blanks: Every possible correlation...Ch. 7 - Which of the following are likely to have a...Ch. 7 - For a collection of 50 pairs of sample data...Ch. 7 - Estimate the correlation coefficient for the data...Ch. 7 - Refer again to the scatterplot in Figure 7.24....Ch. 7 - Fill in the blank: If r = 0.900, then _____ % of...Ch. 7 - In Exercises 710, determine whether the given...Ch. 7 - Prob. 8CQCh. 7 - Prob. 9CQCh. 7 - Prob. 10CQ
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