Question

Among the entire population of homeowners, the mean loss from fire is $250.00 with a standard deviation of $1000.00.  The loss from fire by homeowners is not a normally distributed variable.  Let  be the average loss from fire for 100 randomly chosen homeowners.  Using the sampling distribution for , what is the probability that  will be greater than $450.00?  

Answer 1

Solution :

Given that ,

= 250.00

= / n = 1000.00 / 100 = 100

P( > 450.00 ) = 1 - P( < 450.00 )

= 1 - P[( - ) / < (450.00 - 250.00) / 100]

= 1 - P(z < 2)   

= 1 - 0.9772

= 0.0228