Free Version
Difficult

# Making a Conclusion

STATS-0ZEUJL

The claims department at ABC Insurance Company believes that younger drivers have more accidents and therefore, should be charged higher insurance rates.

The company took a sample of 1,200 policyholders revealed the following result on whether a claim had been filed in the last three years and the age of the policyholder.

The result is:

Age 16 to 25: 170 (no claim) and 74 (claim)
Age 25 to 40: 240 (no claim) and 58 (claim)
Age 40 to 55: 400 (no claim) and 44 (claim)
Age 55 or older: 190 (no claim) and 24 (claim)

Using a $0.05$ significance level, the critical value from the chi-square table is $7.815$.

What is the conclusion?

A

The conclusion is that is not enough evidence to prove that a relationship between insurance rate and age of policyholder.

B

The conclusion is that is a relationship between insurance rate and age of policyholder.

C

The conclusion is that there is no relationship between insurance rate and age of policyholder.

D

The conclusion is not possible.