Question 1

You are a manager working for an insurance company. Your job entails processing individual claims filed by policyholders. In general, few claims are expensive. Each quarter, you compile a report summarizing key claim statistics, such as the number of claims submitted, the average cost per claim, and the total cost of submitted claims. In the last quarter’s report, you notice a large difference between the meanand the medianclaim cost, the mean cost being much higher than the median cost. What do you attribute this difference to? Do you think the claims datais normally distributed? If so, why? If not, what distribution might best describe the data and why? Given the large difference between the two measures of central tendency, which of the two would you rely on in describing the average claim cost and why?

Justify your answers with examples and reasoning

Question 2

Provide three distinct examples of the businessoutcomes (such as company revenue, market capitalization, and advertising expenditure) that you would expect to be normally distributed; justify your selection. Can you envision circumstances under which these outcomes would not be normally distributed?

Provide three distinct examples of the business outcomes that are not normally distributed.

Justify your answers with examples and reasoning In your words but in reference to.

Question 1

You are a manager working for an insurance company. Your job entails processing individual claims filed by policyholders. In general, few claims are expensive. Each quarter, you compile a report summarizing key claim statistics, such as the number of claims submitted, the average cost per claim, and the total cost of submitted claims. In the last quarter’s report, you notice a large difference between the mean and the median claim cost, the mean cost being much higher than the median cost. What do you attribute this difference to? Do you think the claims data is normally distributed? If so, why? If not, what distribution might best describe the data and why? …

The solution provides detailed explanation for examples of central measure for tendency and normal distribution.