Question

We suspect that automobile insurance premiums (in dollars) may be steadily decreasing with the driver's driving experience (in years), so we choose a random sample of drivers who have similar automobile insurance coverage and collect data about their ages and insurance premiums. Which of the following is the most appropriate statistical test to use to determine if insurance premiums are decreasing with the driver's driving experience? A. matched pairs t-test

B. two-sample t-test

C. ANOVA

D. chi-squared test for independence

E. inference for regression

Answer 1

D) a chi square test for independence.

Explanation:

Given that we suspect that automobile insurance premiums (in dollars) may be steadily decreasing with the driver's driving experience (in years), so we choose a random sample of drivers who have similar automobile insurance coverage and collect data about their ages and insurance premiums.

We are to check whether two variables insurance premiums and driving experience are associated.

Two categorical variables are compared for different ages and insurance premiums.

Hence a proper test would be

D) a chi square test for independence.