An insurance company sets up a statistical test with a null hypothesis that the average time for processing a claim is 4 days, and an alternative hypothesis that the average time for processing a claim is greater than 4 days. After completing the statistical test, it is concluded that the average time exceeds 4 days. However, it is eventually learned that the mean process time is really 4 days. What type of error occurred in the statistical test?
A) Type I error
B) Type II error
C) Type III error
D) No error occurred in the statistical sense.

Question

Quizplus · Accepted Answer

The null hypothesis is that the average time for processing a claim is 4 days, and the alternative hypothesis is that the average time for processing a claim is greater than 4 days. The statistical test concludes that the average time exceeds 4 days, but it is eventually learned that the mean process time is really 4 days. This means that the statistical test has made a Type I error, which is rejecting the null hypothesis when it is actually true.

An Insurance Company Sets Up a Statistical Test with a Null