SOLUTION: Determining null and alternative hypotheses The records of a casualty insurance company show that, in the past, its clients have had a mean of 1.7 auto accidents per day with a va

Question 193574: Determining null and alternative hypotheses
The records of a casualty insurance company show that, in the past, its clients have had a mean of 1.7 auto accidents per day with a variance of 0.0036 . The actuaries of the company claim that the variance of the number of accidents per day is no longer equal to 0.0036. 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 H1 that we would use for this test.
Ho:
H1:

Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Determining null and alternative hypotheses
The records of a casualty insurance company show that, in the past, its clients have had a mean of 1.7 auto accidents per day with a variance of 0.0036 . The actuaries of the company claim that the variance of the number of accidents per day is no longer equal to 0.0036. 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 H1 that we would use for this test.
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Ho: sigma^2 = 0.0036
H1: sigma^2 is not equal to 0.0036
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Cheers,
Stan H.

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