Suppose a newspaper article states that the distribution of


Auto insurance premiums. Suppose a newspaper article states that the distribution of auto insurance premiums for residents of California is approximately normal with a mean of $1,650. The article also states that 25% of California residents pay more than $1,800.

(a) What is the Z-score that corresponds to the top 25% (or the 75th percentile) of the standard normal distribution?

(b) What is the mean insurance cost? What is the cutoff for the 75th percentile?

(c) Identify the standard deviation of insurance premiums in LA.

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Basic Statistics: Suppose a newspaper article states that the distribution of
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