What type of probability distribution will the consulting firm most likely employ to analyze the insurance claims in the following problem? An insurance company has called a consulting firm to determine if the company has an unusually high number of false insurance claims. It is known that the industry proportion for false claims is 3%. The consulting firm has decided to randomly and independently sample 100 of the company's insurance claims. They believe the number of these 100 that are false will yield the information the company desires.
A) binomial distribution
B) Poisson distribution
C) hypergeometric distribution
D) None of the above.

Question

Quizplus · Accepted Answer

The scenario involves a fixed number of trials (100 insurance claims), with two possible outcomes (false or not false), and a known probability of success (3%). This is a classic scenario for the binomial distribution.

What Type of Probability Distribution Will the Consulting Firm Most