The Statistical Relationship Between Claim Amount And Income

FORMAT FOR THE WEB EXERCISES The following sections should be incorporated (if enough information provided in the problem):

1. A Summary of the Problem Give a brief introduction to the problem. Please do NOT copy and paste the original problem from the given case study. Give a brief two paragraph description of the overall goals of the study and what must be found in order to solve the problem.

2. Method of solving Describe which tools you learned which will be employed in the problem solving. Describe why the methods you are using will lead to a solution to the problems in the case study.

3. Give the derivation (if one is required) or how specifically you solved your problem in detail. Typically, the case study will guide you towards what should be found and reported on. You must identify the proper tools required to solve the problem as well as use them with any other information or data.

4. Results Summarize your technical results as well as what the results mean in plain English. Your audience typically won’t enjoy reading tables of numbers or heavy mathematics. They like short summary tables, graphs, charts and plain English. After you have described the technical results, translate them into a meaning that any audience, regardless of their mathematical background, can understand.

5. Managerial Implications With any type of problem solving there are usually decisions attached to the solutions. You must take your results and provide recommendations for the best possible decision to make. Justify why you believe the recommended decision will be the best to make. Also perform a sensitivity analysis where appropriate (we will discuss this later in the course).

6. Attachments section (where applicable) This section may include MS Excel files (original calculations that include formulas), statistical analysis output, charts, etc. If your mathematical derivations are long or your work was done using Excel or some other type of software, you must provide the files which show the work. If it is a mathematical derivation, you must actual formulas in Excel.

STYLE Please use Times New Roman font, black, size 12, single space, indented paragraphs, 1-inch margins

Web Exercise #1

1. Import Insurance data into RStudio

2. Assess the normality of the following variables: claim amount, coverage, hoursehold income, and deductible (explain whether or not the variables are normally distributed, are distribution symmetrical or skewed). Explain your findings and support with descriptives (numerical and/or graphical)

3. Is there a statistical relationship between claim amount and income? Explain your findings and support with descriptives (numerical and/or graphical)

4. Is there a statistical relationship between the type of claim and marital status?

Instructions:

Please submit a single PDF file with your answer.