You must install JMP pro on your computer before attempting this assignment. You must use the data file: MedicalMalpractice. JMP. Read the case very carefully and answer the questions (fill in the blanks) when necessary. In addition, you must reproduce all the exhibits (via screenshots of your work) by following the instructions provided in the case. Exhibit 1 [1.5 pt] a. The mean (average) payment is _ while the median (middle) is _. When a histogram is right skewed, as is the case here, the mean will exceed the median.

Explanation:

Deliverable:

Create a word document and answer all the questions and attach the screen shot of all the figures in the case (Exhibit-1 to 11). The first page of your document must have your full name and student ID.

Analysis

We begin by looking at the key variable of interest, the amount of claim payment. Exhibit 1 displays a histogram and summary statistics for Amount.

Exhibit 1 Distribution of Amount

(Analyze > Distribution; Select Amount as Y, Columns, and click OK. For a horizontal layout select Stack under the top red

triangle.)

From Exhibit 1 we see that the histogram of Amount is skewed right, meaning that there is a long tail,

with several very high payments. The mean (average) payment is _______ while the median (middle) is

___________. When a histogram is right skewed, as is the case here, the mean will exceed the

median. This is because the mean is influenced by extreme values – the high payments that we

observe in the histogram inflate the mean.

A measure of the spread of the data is the standard deviation (StdDev in Exhibit 1). The higher the

standard deviation, the larger the spread, or variation, in the data. When the data are skewed, the

standard deviation, like the mean, will be inflated.

Other useful summary statistics are the quartiles. The first quartile (next to 25.0% in Exhibit 1) is

________ and the third quartile (next to 75.0%) is __________. The interquartile range, defined as Q3 –

Q1, is a measure of the amount of spread or variability in the middle 50% of the data. This value is

displayed graphically in the outlier box plot (above the histogram). A larger version of this plot is

displayed below.

The left edge of the box is the first quartile, the center line is the median or second quartile, and the right

edge of the box is the third quartile. Hence, the width of the box is the interquartile range, or IQR.

1.5 pt.

(Find attached histogram diagram)