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Hypothesis Testing: MCQs

The Idris Car Insurance Company depends on its internal adjusters to make accurate estimations of damage to cars of policyholders involved in accidents. As a test of quality control, the insurance company had an experienced adjuster, Toni, review 10 cars which had been evaluated by a new adjuster, Mervin. The results of their estimates are compared (in thousands of dollars). At a significance level of .05, is there a difference in the mean appraisals of the two adjusters?

The following output is provided.

Toni Mervin
Mean 8.38 8.43
Variance 61.1 50.6
Observations 10 10
Pearson Correlation 0.99
Hypothesized Mean Difference 0
Df 9
t Stat -0.12
P(T<=t) one-tail 0.45
t Critical one-tail 1.83
P(T<=t) two-tail 0.91
t Critical two-tail 2.26

1. What output is this table from?

A. ANOVA-single factor
B. T-test of paired samples
C. T-test assuming equal variances
D. T-test assuming unequal variances
E. Z-test two-sample for means

2. Is there a difference between the mean estimates provided by the two adjusters? Why?

A. Yes, there is a difference because the t-value is higher than the critical value for a one-tailed test.
B. Yes, there is a difference because the t-value is higher than the critical value for a two-tailed test.
C. Yes, there is a difference because the p-value is higher than .05.
D. No, there is no difference because the t-value is higher than the critical value for a one-tailed test.
E. No, there is no difference because the t-test result is higher than the critical value for a two-tailed test.

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Answers

1. C. T-test assuming equal variances

2. Correct Answer: No, there is no difference because the t-test result is less ...

Solution Summary

The solution provides answers to multiple choice questions on hypothesis testing of difference in mean appraisals of two adjusters of Idris Insurance Company.

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