document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=460948>Question 460948</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Suppose that an insurance agent for Almost Heaven Insurance claims that less than 20% of his life insurance policies ever have to \"pay out.\" You decide to test his claim at the a=0.02 significance level. A sample of 75 policies from last year finds that 30 of them had to pay out. The hypotheses is as follows: Ho: p>(underlined) 0.20 and H1: p< 0.20. with a critical value of -2.05 compute the sample statistic and choose the appropriate solution.\r<BR>\n" );
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document.write( " Solution is either A) We cannot reject HO, thus it may be that at least 20% of the policies pay out or B) We reject Ho, thus less than 20% of the policies pay out. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #316175 by </B><A HREF=/tutors/aboutme.mpl?userid=edjones><B>edjones(8007)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=edjones><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=edjones><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=316175\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> H[o]:p<.2 NOT what you have above. He claims that LESS than 20% of his life insurance policies ever have to \"pay out.\" The null hypothesis should be what HE claims.<BR>\n" );
document.write( "p[o]=.20, q[o]=.80, <BR>\n" );
document.write( "n=75, P=30/75 = .4<BR>\n" );
document.write( "s=sqrt(.2*.8*75)=sqrt(12)=3.46<BR>\n" );
document.write( "m=.2*75=15<BR>\n" );
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document.write( "=.2/.0462<BR>\n" );
document.write( "=4.33<BR>\n" );
document.write( "The critical value should be 2.05 NOT -2.05<BR>\n" );
document.write( "4.33 is way above 2.05 and the null hypothesis is rejected.<BR>\n" );
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document.write( "Ed </SPAN>\n" );
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