BuyFind

STATISTICS F/BUSINESS+ECONOMICS-TE...

13th Edition
Anderson
Publisher: CENGAGE L
ISBN: 9781305881884
BuyFind

STATISTICS F/BUSINESS+ECONOMICS-TE...

13th Edition
Anderson
Publisher: CENGAGE L
ISBN: 9781305881884

Solutions

Chapter 8, Problem 44SE

a.

To determine

Find the margin of error for 95% confidence level.

Expert Solution

Answer to Problem 44SE

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

Explanation of Solution

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 zα2σn.

From the “Table 8.1 value of zα2”, the value of zα2 for 95% is 1.96.

The value of margin of error is

zα2σn=1.961554=1.96×2.04=4

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

Answer to Problem 44SE

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).

Explanation of Solution

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

x¯±zα2σn=33.77±4=(33.774,33.77+4)=(29.77,37.77)

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

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