In order to estimate the mean debt-to-equity ratio of its loan portfolio, the bank randomly selects 12 of its commercial loan accounts. Audits of these twelve companies found the following 12 debt-to-equity ratios. 1.04 1.08 1.13 1.18 1.23 1.32 1.41 1.46 1.55 1.57 1.70 1.77 Note: the sample standard deviation of these 12 ratios is s = 0.245 Determine an appropriate 98% confidence interval for the mean ratio of the bank’s entire portfolio. x¯±t⋅CFsn√x¯±t⋅CFsn Note: σ is unknown, and we have to reply on s. This forces us to use the t-distribution and not the standard normal. Note: Obtain the t-value from the t-distribution excel spreadsheet. We already determined x¯x¯ in part a). When looking up the t-value, what is the appropriate degrees of freedom to use? ["", "", "", ""] What is the appropriate value to use for t? ["", "", "", ""] What is the appropriate CF? ["", "", "", ""] What is the value for n?
In order to estimate the mean debt-to-equity ratio of its loan portfolio, the bank randomly selects 12 of its commercial loan accounts. Audits of these twelve companies found the following 12 debt-to-equity ratios.
| 1.04 | 1.08 | 1.13 | 1.18 | 1.23 | 1.32 |
| 1.41 | 1.46 | 1.55 | 1.57 | 1.70 | 1.77 |
Note: the sample standard deviation of these 12 ratios is s = 0.245
Determine an appropriate 98% confidence interval for the mean ratio of the bank’s entire portfolio.
x¯±t⋅CFsn√x¯±t⋅CFsn
Note: σ is unknown, and we have to reply on s.
This forces us to use the t-distribution and not the standard normal.
|
Note: Obtain the t-value from the t-distribution excel spreadsheet. |
We already determined x¯x¯ in part a).
When looking up the t-value, what is the appropriate degrees of freedom to use? ["", "", "", ""]
What is the appropriate value to use for t? ["", "", "", ""]
What is the appropriate CF? ["", "", "", ""]
What is the value for n?
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