State the hypothesis and test statistic.
An insurance industry report indicated that 40 percent of those persons involved in minor traffic accidents this year have been involved in at least one other traffic accident in last 5 years. An advisory group decided to investigate this claim, believing it was too large. A sample of 200 traffic accidents this year showed 74 persons were also involved in another accident within the last five years. Exercise the .01 significance level.
a. Can we use z as the test statistic? Tell why or why not.
b. status the null hypothesis and the alternate hypothesis.