Question

results of the significance test. 7.40 Potential insurance are concerned about the hi mal insurance fraud? Insurance adjusters erned about the high estimates they are receiv Trom Jocko's Garage. To see if the estimates are y high, each of 10 damaged cars was taken to o another garage and the estimates (in recorded. Here are the results: I. JOCKO unreasonably high, each of Jocko's and to another garage dollars) were recorded. He Car I 1 Jocko's 1410 Other 1250 Car I 6 Jocko's 1520 Other | 1575 2 1550 1300 7 1750 1600 3 1250 1250 8 3600 3380 4 1300 1200 9 2250 2125 900 950 10 2840 2600 (a) For each car, subtract the estimate of the other garage from Jocko's estimate. Find the mean and the standard deviation for this difference. (b) Test the null hypothesis that there is no difference between the estimates of the two garages. Be sure to specify the null and alternative hypotheses, the test statistic with degrees of freedom, and the P-value. What do you conclude using the 0.05 significance level? (c) Construct a 95% confidence interval for the difference in estimates. (d) The insurance company is considering seeking repayment from 1000 claims filed with Jocko's last year. Using your answer to part (c), what repayment would vou recommend the insurance company seek? Explain your answer.