Question

Insurance companies track life expectancy information to assist in determining the cost of life insurance policies. Last year the average life expectancy of all policyholders was 77 years. ABI Insurance wants to determine if their clients now have a longer life​ expectancy, on​ average, so they randomly sample some of their recently paid policies. The insurance company will only change their premium structure if there is evidence that people who buy their policies are living longer than before. The correct null and alternative hypotheses areoptions:a.H0: p = 77 and HA: p > 77b.H0: %u03BC = 77 and HA: %u03BC < 77c.H0: %u03BC = 77 and HA: %u03BC > 77d.H0: %u03BC = 77 and HA: %u03BC %u2260 77e.H0: p = 15 and HA: p < 77

Answer 1

Explanation:

The null hypothesis is the hypothesis that is assumed to be true. It is an expression that is the opposite of what the researcher predicts.

The alternative hypothesis what the researcher expects or predicts. It is the statement that is believed to be true if the null hypothesis is rejected.

From the given situation,

The life expectancy of all policyholders was known to be 77 years. This is the null hypothesis.

The insurance company thinks or is predicting that people who buy their policies are living longer than before. This is the alternative hypothesis.

Therefore, the correct null and alternative hypotheses are

a. H0: p = 77 and HA: p > 77