Question

hurricane andrew swept through southern florida causing billions of dollars of damage. because of the severity of the storm and the type of residential construction used in this semitropical area, there was some concern that the average claim size would be greater than the historical average hurricane claim of $24,500. several insurance companies collaborated in a data gathering experiment. they randomly selected 24 homes and sent adjusters to settle the claims. in the sample of 24 homes, the average claim was $26,000 with a population standard deviation of $3400. is there sufficient evidence at a 0.10 significance level to support the claim that the home damage is greater than the historical average? assume the population of insurance claims is approximately normally distributed. step 1 of 3: state the null and alternative hypotheses for the test. fill in the blank below. $h_0:mu = 24,500$ $h_a:mu$ ______ $24,500$ answer: ≠ > <

Explanation:

Step1: Identify the claim

The claim is that the home - damage (average claim size) is greater than the historical average.

Step2: Determine the alternative hypothesis

Since we are testing if the population mean $\mu$ is greater than the historical value, the alternative hypothesis $H_a$ has the '>' symbol.

Answer:

$H_a:\mu > 24500$