A certain brokerage house wants to estimate the mean daily return on a certain stock. A random sample of 14 days yields the following return percentages. -2.17, -1.48, 0.56, 2.47, – 1.61, -0.77, 1.67, 2.47, –2.56, 1.56, -1.44, 1.71, -2.36, 1.8 Send data to calculator Send data to Excel If we assume that the returns are normally_distributed, find a 99% confidence interval for the mean daily return on this stock. Then find the lower limit and upper limit of the 99% confidence interval. Carry your intermediate computations to at least three decimal places. Round your answers to one decimal place. (If necessary, consult a list of formulas.) Lower limit:| Upper limit:|
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
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