An insurance company randomly selects 100 claims from a chain of dialysis clinics and conducts an audit. The mean overpayment per claim in this sample is $21.32. The company is interested in...

An insurance company randomly selects 100 claims from a chain of dialysis clinics and conducts an audit. The mean overpayment per claim in this sample is $21.32. The company is interested in extrapolating this information to the population of all claims from this chain. They want to make a statement of the form “with confidence level 95%, the mean overpayment per claim is at least ______.”

(a) Based on past experience, the company assumes that σ = 32:45. Compute the appropriate confidence limit.

(b) What is likely to be true about the shape of the distribution for the individual overpayments? Why is the large sample size a critical part of this problem?