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Question 287:



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I'd used the binomial probability theorem and calculate the exact probabilities. You are testing the hypothesis that 5720/11000 = 52% is sufficient evidence (at the .01 level) to conclude that more than 50% of accidents occur within 5 miles of home. In other words, if the probability is less than .01 or 1%, we're not comfortable concluding that observing 52% of crashes given 11,000 observations is greater than chance fluctuations.

So, you can use Excel and type =BINOMDIST(5720,11000, .50, TRUE). The TRUE option means you wan the cumulative probability of greater than or equal to .52, instead of just the probability of .52. In this case Excel provides us with a probability of .000013, far less than our criteria of .01, so we can comfortable say we have evidence that more than 50% of accidents occur within 5 miles of home

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