A random sample of 40 collision claims of 30- to 59-year-old drivers results in a mean claim of $3669 with a sample standard deviation of $2029. An independent random sample of 40 collision claims of 20- to 24-year-old drivers results in a mean claim of $4586 with a sample standard deviation of $2302. Using the concept of hypothesis testing, provide an argument that justifies charging a higher insurance premium to 20- to 24-year-old drivers with alpha = 0.05.

Question

A random sample of 40 collision claims of 30- to 59-year-old drivers results in a mean claim of $3669 with a sample standard deviation of $2029. An independent random sample of 40 collision claims of 20- to 24-year-old drivers results in a mean claim of $4586 with a sample standard deviation of $2302. Using the concept of hypothesis testing, provide an argument that justifies charging a higher insurance premium to 20- to 24-year-old drivers with alpha = 0.05.

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Hypothesis Testing

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