Exam MAS-I Practice Question 33
Study guide: Exam MAS-I
An actuary tests whether average claim cost has risen, H_0: \mu = 500 against H_1: \mu > 500, with a one-sided z-test on the mean of n = 36 claims at significance level \alpha = 0.05. The claim standard deviation is known. The true mean is in fact 540.
Which single change, with everything else held as stated, increases the probability of a Type II error?
- A) Raising the sample size from 36 to 64 claims
- B) Raising the significance level from 0.05 to 0.10
- C) Having a true mean of 560 rather than 540
- D) Having a smaller claim standard deviation
- E) Lowering the significance level from 0.05 to 0.01
Answer this question and see the worked solution