Online insurance. After seeing countless commercials claiming one can get cheape
ID: 3339693 • Letter: O
Question
Online insurance. After seeing countless commercials claiming one can get cheaper car insurance from an online company, a local insurance agent was concerned that he might lose some customers. To investigate, he randomly selected profiles (type of car, coverage, driving record, etc.) for 10 of his clients and checked online price quotes for their policies. The comparisons are shown in the two tables below. Which among the following tests should he use? Variable Count Mean StDev Local 10 799.200 299.281 Online 10 753.300 256.267 PriceDiff 10 45.900 175.663 Local Online PriceDiff 568 391 872 602 270 451 488 -37 1229 903 326 605 677 -72 1021 1270 249 783 703 80 844 789 907 1008 101 712 702 10Explanation / Answer
Two sample z test is used when we have to check equality of two population mean, and also we need large sample but here we have only 10 sample so option "A" is not correct.
In pooled test we need equal population variance but in problem they did not give such condition ,so option "B" is also wrong.
Unequal pooled t test used to check equality of two population mean when we have unequal population variance and we have small sample size. Here our all assumptions are correctly fit for our problems, so option "C" is correct.
Paired t test is used when we have data like before and after condition. For example weight reduction before diet and after diet. So option "D" is also wrong
Option " C" is correct.
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