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assume that about 30% of all US adults try to pad their insurance claims. suppos

ID: 3153066 • Letter: A

Question

assume that about 30% of all US adults try to pad their insurance claims. suppose that you are the director of an insurance adjustment office. your office has just received 140 insurance claims to be processed in the next few days. what is the probability that fewer than 38 of the claims have been padded? assume that about 30% of all US adults try to pad their insurance claims. suppose that you are the director of an insurance adjustment office. your office has just received 140 insurance claims to be processed in the next few days. what is the probability that fewer than 38 of the claims have been padded? assume that about 30% of all US adults try to pad their insurance claims. suppose that you are the director of an insurance adjustment office. your office has just received 140 insurance claims to be processed in the next few days. what is the probability that fewer than 38 of the claims have been padded?

Explanation / Answer

assume that about 30% of all US adults try to pad their insurance claims. suppose that you are the director of an insurance adjustment office. your office has just received 140 insurance claims to be processed in the next few days. what is the probability that fewer than 38 of the claims have been padded?

p=0.3

n=140

Normal approximation to Binomial distribution used.

Expectation = np = 42

Variance = np(1 - p) = 29.4

Standard deviation = 5.4222

Z value for 38, z =(38-42)/5.4222 = -0.74

P( x < 38)= P( z < -0.74)

=0.3669

Alternate answer:

If we use Binomial distribution,

P( x <38) =0.2044    ( using software)