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 level.
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
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 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
Thus, the 99% confidence interval for population mean is ($29.77, $37.77).
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Chapter 8 Solutions
STATISTICS F/BUSINESS+ECONOMICS-TEXT
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