In the Automobiles example, which company has the highest rate and how far from the mean is it in standard deviations?

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Multiple Choice

In the Automobiles example, which company has the highest rate and how far from the mean is it in standard deviations?

Think in terms of standardized distances from the mean. The value that is highest is the one with the largest positive z-score, because that shows how far above average it lies. In the Automobiles example, the highest rate is for the company with a positive deviation that is larger than the others. That company sits about 1.92 standard deviations above the mean, meaning its rate is higher than average by nearly two standard deviations. This is larger than any other option, which either place a value below the mean or place it above by a smaller amount. So the correct interpretation is that the highest rate occurs for that company and its z-score is approximately +1.92.

Think in terms of standardized distances from the mean. The value that is highest is the one with the largest positive z-score, because that shows how far above average it lies.

In the Automobiles example, the highest rate is for the company with a positive deviation that is larger than the others. That company sits about 1.92 standard deviations above the mean, meaning its rate is higher than average by nearly two standard deviations. This is larger than any other option, which either place a value below the mean or place it above by a smaller amount. So the correct interpretation is that the highest rate occurs for that company and its z-score is approximately +1.92.

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