Chapter 8, Problem 1CQ

Define the following terms:

1. Point estimate
2. Confidence interval
3. Confidence level

To determine

To explain: The term point estimate.

Explanation of Solution

The point estimate is the statistic by which the true population parameter is estimated using the sample data. It is known that the sample mean $\left(\overline{x}\right)$ is the point estimate of population mean $\left(\mu \right)$ .

To determine

To explain: The term confidence interval.

Explanation of Solution

Confidence intervals provides the range of values in which the true population parameter is likely to fall in.

To determine

To explain: The term confidence level.

Explanation of Solution

The confidence level shows the percentage of the confidence interval that would capture the true population parameter. It must be noted that the confidence level does not represent the probability of falling the true population parameter between two values rather it shows the percentage of confidence interval that are likely to contain the population parameter if too many samples of same size from the same population are taken out.