Question

An insurance company has the business objective of reducing the amount of time it takes to approve

applications for life insurance. The approval process of underwriting, which includes a review of
medical records, has a mean processing time of 45 days and a standard deviation of 12 days. Suppose a
sample of 36 applications is selected. The standard error of the mean is

Answer 1

The standard error of the mean for the insurance company's underwriting approval process with a mean of 45 days, a standard deviation of 12 days, and a sample size of 36 applications is 2 days.

Step-by-step explanation:

The subject of this question is the calculation of the standard error of the mean in the context of processing life insurance applications. The standard error of the mean (SEM) is calculated by dividing the standard deviation (σ) by the square root of the sample size (n). In this case, the mean processing time is stated to be 45 days with a standard deviation of 12 days, and the sample size is 36 applications.

To find the standard error of the mean, we use the formula:

SEM = σ / √n

SEM = 12 days / √36 = 12 days / 6 = 2 days

Therefore, the standard error of the mean for this sample of 36 applications is 2 days.