Explanation Calculation: The given information is that the standard deviation for the sample of 13 Canadian IPOs is 14.95. The confidence interval formula for population standard deviation σ is given by: ( n − 1 ) × s 2 χ ( α 2 ) 2 ≤ σ ≤ ( n − 1 ) × s 2 χ 1 − ( α 2 ) 2 Here, the significance level is α = 0.05 . Degrees of freedom: n − 1 = 13 − 1 = 12 Critical value for χ ( 1 − α 2 ) 2 : χ 1 − ( α 2 ) 2 = χ 1 − ( 0.05 2 ) 2 = χ 0.975 2 Procedure: Step by step procedure to obtain χ 2 0.975 value using Table 11.1 is given below: Locate the value 12 in the left column of the table. Go through the row corresponding to the value 12 and column corresponding to the value χ 2 0.975 of the table. Thus, the value of χ 2 0.975 with 12 degrees of freedom is 4.404. That is χ 2 0.975 = 4.404 _ . Critical value for χ α 2 2 : χ ( α 2 ) 2 = χ ( 0

Essentials Of Statistics For Business & Economics

9th Edition

ISBN: 9780357045435

Author: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran

Publisher: South-Western College Pub

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Chapter 11, Problem 24SE

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Compute the 95% confidence interval estimate of the population standard deviation for the underpricing-overpricing indicator.

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Essentials Of Statistics For Business & Economics

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Compute the 95% confidence interval estimate of the population standard deviation for the underpricing-overpricing indicator.

Solution Summary: The author calculates the 95% confidence interval estimate of the population standard deviation for the underpricing-overpriced indicator using Table 11.1.

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Compute the 95% confidence interval estimate of the population standard deviation for the underpricing-overpricing indicator.

Chapter 11 Solutions