Question: A recent insurance industry report claimed that 40 percent of those persons involved in minor traffic accidents this year have been involved in at least one other traffic accident in the last five years. An advisory group decided to investigate this claim, believing it was too large. A sample of 200 traffic accidents this year showed 74 persons were also involved in another accident within the last five years.

1. At the .01 level of significance, is there evidence that the advisory group is correct?

   Complete the following:
   State H 0 .
   2. State H 1 .
   3. State the value of α.
   4. State the value of the test statistic.
   5. State the p-value.
   6. State the decision in terms of H 0 and why.
   7. State the decision in terms of the problem.

2. Is it appropriate to use the z-statistic for this test? Explain your answer.
3. Explain the meaning of the p-value in this problem.

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