State Insurance Company believes that the age of the driver and - 6529

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Request Description

State Insurance Company believes that the age of the driver and number of accidents that occurs are related. The feeling is that younger drivers are more careless and will have more accidents. The claims department wants to determine if this line of thinking is correct. To answer this question a random sample of 1500 policyholders was investigated. A chi square analysis was performed on the data at the .05 significant level. The analysis produced a chi square value of 47.56. What is the correct decision regarding the null hypothesis that whether a claim is filed and the age of the policyholder are not related?

A.   The null hypothesis is incorrect.

B.   Accept the null hypothesis; there is no relationship.

C.    The sample needs to be larger; no decision can be made.

D.   Reject the null hypothesis; there is a relationship.

Solution Description

State Insurance Company believes that the age of the driver and number of accidents that occurs are related. The feeling is that younger drivers are more careless and will have more accidents. The claims department wants to determine if t