Outline the characteristics of a model which predicts its capital adequacy over a decade into the future of long term insurance?
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Answer:
Yes. The male and female consumers differ in the amounts they spend.
Step-by-step explanation:
We can express the null and alternative hypothesis as:
It is assumed a significance level of 0.05.
The standard deviation of the difference of means is calculated as:
The test statistic is
The degrees of freedom are:
The P-value for t=10.11 is P=0, so it is smaller than the significance level. The null hypothesis is rejected.
We can conclude that male and female consumers differ in the amounts they spend.