Question

evaluate the claim.
an insurance company reported that, on average, claims for a certain medical procedure are $942. an independent organization constructed a 95% confidence interval of ($930, $950) for the average amount claimed for the particular medical procedure. what conclusion best evaluates the truthfulness of the number reported by the insurance company?
with 95% certainty, the average claim for this medical procedure is $942.
with 95% certainty, the average claim for this medical procedure is not $942.
the confidence interval is consistent with an average claim of $942 for this medical procedure.
with 100% certainty, the average claim for this medical procedure is $942.

Explanation:

Step1: Understand confidence interval concept

A 95% confidence interval gives a range of values within which the true population parameter (here, the average claim amount) is likely to lie with 95% confidence.

Step2: Check if the reported value lies in the interval

The insurance - company reported value of \( \$942 \) lies within the interval \( (\$930,\$950) \).

Answer:

The confidence interval is consistent with an average claim of \(\$942\) for this medical procedure.