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

What is the decision rule?


Reject $Ho$ if computed $χ2 > 7.815$


Reject $Ho$ if computed $χ2 < 7.815$


Do not reject $Ho$ if computed $χ2 > 7.815$


Accept $Ho$ if computed $χ2 > 7.815$

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