An insurance company sets up a statistical test with a null hypothesis that the average time for processing a claim is 7 days, and an alternative hypothesis that the average time for processing a claim is greater than 7 days. After completing the statistical test, it is concluded that the average time exceeds 7 days. However, it is eventually learned that the mean process time is really 7 days.
What type of error occurred in the statistical test?
A) No error occurred in the statistical sense.
B) Type II error
C) Type I error
D) Type III error

Question

Quizplus · Accepted Answer

A Type I error occurs when the null hypothesis is rejected when it is actually true. In this case, the null hypothesis that the average time is 7 days was rejected, but it was actually true.

An Insurance Company Sets Up a Statistical Test with a Null