A sample survey of 54 discount brokers showed that the
- a. Using the sample data, what is the margin of error associated with a 95% confidence interval?
- b. Develop a 95% confidence interval for the mean price charged by discount brokers for a trade of 100 shares at $50 per share.
a.
Find the margin of error for 95% confidence interval.
Answer to Problem 48SE
The margin of error for 95% confidence interval is 4.
Explanation of Solution
Calculation:
The given information is that the mean price charge for a trade of 100 shares at $0 per share by a sample of 54 brokers was $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.
Find the 95% confidence interval for mean price charged by discount brokers for a trade of 100 shares at $50 per share.
Answer to Problem 48SE
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
Thus, the 95% confidence interval for population mean is ($29.77, $37.77).
Want to see more full solutions like this?
Chapter 8 Solutions
Bundle: Modern Business Statistics with Microsoft Office Excel, Loose-Leaf Version, 6th + MindTap Business Statistics, 2 terms (12 months) Printed Access Card
- MATLAB: An Introduction with ApplicationsStatisticsISBN:9781119256830Author:Amos GilatPublisher:John Wiley & Sons IncProbability and Statistics for Engineering and th...StatisticsISBN:9781305251809Author:Jay L. DevorePublisher:Cengage LearningStatistics for The Behavioral Sciences (MindTap C...StatisticsISBN:9781305504912Author:Frederick J Gravetter, Larry B. WallnauPublisher:Cengage Learning
- Elementary Statistics: Picturing the World (7th E...StatisticsISBN:9780134683416Author:Ron Larson, Betsy FarberPublisher:PEARSONThe Basic Practice of StatisticsStatisticsISBN:9781319042578Author:David S. Moore, William I. Notz, Michael A. FlignerPublisher:W. H. FreemanIntroduction to the Practice of StatisticsStatisticsISBN:9781319013387Author:David S. Moore, George P. McCabe, Bruce A. CraigPublisher:W. H. Freeman