Question

An insurance company reported that, on average, claims for a certain medical procedure are $942. An independent organization constructed a 95% confidence interval of ($930 , $950) for the average amount claimed for the particular medical procedure. What conclusion best evaluates the truthfulness of the number reported by the insurance company?

Answer 1

Answer:

Step-by-step explanation:

The question is incomplete. The complete question is:

An insurance company reported that, on average claims for a certain medical procedure are $942. an independent organization constructed a 95% confidence interval of ($930, $950) for the average amount claimed for the particular medical procedure. what conclusion best evaluates the truthfulness of the number reported by the insurance company?

a) with 95% certainty, the average claim for this medical procedure is $942.

b) with 95% certainty, the average claim for this medical procedure is not $942.

c) the confidence interval is consistent with an average claim of $942 for this medical procedure

Solution:

Confidence interval is used to express how confident we are that the population parameter that we are looking for is contained in a range of given values. Looking at the given confident interval, the lower limit is $930 and the upper limit is $950. We can see that the population mean, $942 lies within these values. The correct option would be

c) the confidence interval is consistent with an average claim of $942 for this medical procedure