An insurance company evaluates many variables about a person before deciding on an appropriate rate for automobile insurance. A representative from a local insurance agency selected a random sample of 15 insured drivers and recorded the amount of claims each made in the last 3 years. Based on this information, which of the following will you construct to learn about the average amount of claims made by the company's customer?
A) confidence interval estimate for the proportion using the standard normal distribution
B) confidence interval estimate for the difference using the standard normal distribution
C) confidence interval estimate for the mean using the Student's t distribution
D) confidence interval estimate for the mean using the standard normal distribution

Question

Quizplus · Accepted Answer

To learn about the average amount of claims made by the company's customer, a confidence interval estimate for the mean using the Student's t distribution is the best choice since the population standard deviation is unknown and the sample size is less than 30. Therefore, we need to use the t distribution instead of the standard normal distribution.

An Insurance Company Evaluates Many Variables About a Person Before