SOLUTION: The records of a casualty insurance company show that, in the past, its clients have had a mean of auto accidents per day with a variance of 1.8 . The actuaries of the company cla

Question 175705: The records of a casualty insurance company show that, in the past, its clients have had a mean of auto accidents per day with a variance of 1.8 . The actuaries of the company claim that the variance of 0.0016 the number of accidents per day is no longer equal to 0.0016 . Suppose that we want to carry out a hypothesis test to see if there is support for the actuaries' claim. State the null hypothesis Ho and the alternative hypothesis Hi that we would use for this test.

Answer by stanbon(48569) (Show Source):
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The records of a casualty insurance company show that, in the past, its clients have had a mean of auto accidents per day with a variance of 1.8 . The actuaries of the company claim that the variance of 0.0016 the number of accidents per day is no longer equal to 0.0016 . Suppose that we want to carry out a hypothesis test to see if there is support for the actuaries' claim. State the null hypothesis Ho and the alternative hypothesis Hi that we would use for this test.
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Ho: sigma^2 = 1.8
Ha: sigma^2 is not equal to 1.8
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Cheers,
Stan H.