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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 results were:

Age 16 to 25: 70 (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, what is the appropriate null hypothesis in this study?


The null hypothesis is that insurance rate is not independent of age of policyholder.


The null hypothesis is that insurance rate is related to age of policyholder.


The null hypothesis is that the difference between the observed and expected frequencies is small.


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

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