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13th Edition

Anderson

Publisher: CENGAGE L

ISBN: 9781305881884

Chapter 8, Problem 44SE

**a.**

To determine

Find the margin of error for 95% confidence level.

Expert Solution

The margin of error for 95% confidence level is 4.

**Calculation:**

The given information is that the sample of 54 discount brokers shows the mean price of the trade is $50 for 100 shares is $33.77 and the population standard deviation is $15.

The formula for margin of error is

From the “Table 8.1 value of

The value of margin of error is

Thus, the value of margin of error is 4.

**b.**

To determine

Find the 95% confidence interval for mean price charged by discount brokers for a trade of 100 shares at $50 per share.

Expert Solution

The 95% confidence interval for mean price charged by discount brokers for a trade of 100 shares at $50 per share is ($29.77, $37.77).

**Calculation:**

From part (a), the margin of error is 4.

The mean value for the 54 broker for trade of 100 shares at $50 per share is $33.77.

The value of confidence interval for population mean is

Thus, the 99% confidence interval for population mean is ($29.77, $37.77).

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