An insurance company is reviewing its present policy rates. When originally setting the rates they believed that the average claim amount was $1,800. Now there are concerns that if the true mean is really higher than this they could potentially lose a lot of money. They randomly choose 40 claims and compute a sample mean of $1,950. Supposing that the standard deviation of claims is $500 and set significance level = :05, test to see if the insurance company must be concerned.
Show all of your work and clearly label each of your computations. Share your computations from Excel and your interpretations of your findings in your Word document.
Copy and paste your computations for the three problems from Excel to Word and submit one Word document with your clearly labeled computations and interpretations.
Did you take statistics?