The preventable monthly loss at a company has a normal distribution with a mean of $4700 and a standard deviation of $40. A new policy was put into place, and the preventable loss the next month was $4460. What inference can you make about the new policy?
A) Because the probability that the monthly loss would be as low as $4460 is small, the new policy is working.
B) Because the probability that the monthly loss would be as low as $4460 is not very small, the new policy is not working.
C) While the probability that the monthly loss would be as low as $4460 is small, it is not unexpected.
D) The new policy is probably less effective than the one it replaced.

Question

Quizplus · Accepted Answer

The probability of observing a loss as low as $4460 is small given the normal distribution with a mean of $4700 and a standard deviation of $40, suggesting the new policy may be effective.

The Preventable Monthly Loss at a Company Has a Normal