Introduction To The Practice Of Statistics
Introduction To The Practice Of Statistics
8th Edition
ISBN: 9781464158971
Author: Moore, David S., MCCABE, George P., Craig, Bruce A.
Publisher: W.h. Freeman And Company, A Macmillan Higher Education Company,
bartleby

Concept explainers

bartleby

Videos

Question
Book Icon
Chapter 6.1, Problem 14E

Section 1

To determine

To graph: The diagram that illustrates the effect of the confidence level on the width of the interval.

Section 1

Expert Solution
Check Mark

Explanation of Solution

Calculation: The confidence intervals based on different sample sizes need to be determined in order to draw the required diagram. The lower and upper bounds of the confidence interval for the population mean μ, at a significance level of α is calculated using the following formula:

Lower bound = ˉxm=ˉxZα2×σn

And,

Upper bound = ˉx+m=ˉx+Zα2×σn

Where ˉx and m represent the sample mean and margin of error respectivelyand σ denotes the population standard deviation and n is the size of the sample. Zα2 is the critical value of the standard normal distribution at a significance level of α, whose value is obtained from TableA provided in the book. For a confidence level of 80%, the level of significance α=0.20. Therefore,

Lower bound = ˉxZα/2×σn=73Z0.20/2×2849=731.282×2849=67.87

And,

Upper bound = ˉx+Zα/2×σn=73+Z0.20/2×2849=73+1.282×2849=78.13

Therefore, the required confidence interval is (67.87,78.13).

For a confidence level of 90%, the level of significance α=0.10. Therefore,

Lower bound = ˉxZα/2×σn=73Z0.10/2×2849=731.645×2849=66.42

And,

Upper bound = ˉx+Zα/2×σn=73+Z0.10/2×2849=73+1.645×2849=79.58

Therefore, the required confidence interval is (66.42,79.58).

For a confidence level of 95%, the level of significance α=0.05. Therefore,

Lower bound = ˉxZα/2×σn=73Z0.05/2×2849=731.96×2849=65.16

And,

Upper bound = ˉx+Zα/2×σn=73+Z0.05/2×2849=73+1.96×2849=80.84

Therefore, the required confidence interval is (65.16,80.84).

For a confidence level of 99%, the level of significance α=0.01. Therefore,

Lower bound = ˉxZα/2×σn=73Z0.01/2×2849=732.58×2849=62.68

And,

Upper bound = ˉx+Zα/2×σn=73+Z0.01/2×2849=73+2.58×2849=83.32

Therefore, the required confidence interval is (62.68,83.32). Hence, the diagram which shows the effect of the confidence level on the width of the interval is shown below:

Graph:

Section 2

To determine

To explain: The results.

Section 2

Expert Solution
Check Mark

Answer to Problem 14E

Solution: The width of the confidence interval expands due to hike in the level of confidence.

Explanation of Solution

The margin of error rises with a rise in the confidence level because there is a direct relationship between the level of confidence and margin of error. This leads to an expansion in the width of the confidence interval. Hence, it can be concluded that as level of confidence increases, the width of the confidence interval increases.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
The class will include a data exercise where students will be introduced to publicly available data sources. Students will gain experience in manipulating data from the web and applying it to understanding the economic and demographic conditions of regions in the U.S. Regions and topics of focus will be determined (by the student with instructor approval) prior to April. What data exercise can I do to fulfill this requirement? Please explain.
Consider the ceocomp dataset of compensation information for the CEO’s of 100 U.S. companies. We wish to fit aregression model to assess the relationship between CEO compensation in thousands of dollars (includes salary andbonus, but not stock gains) and the following variates:AGE: The CEOs age, in yearsEDUCATN: The CEO’s education level (1 = no college degree; 2 = college/undergrad. degree; 3 = grad. degree)BACKGRD: Background type(1= banking/financial; 2 = sales/marketing; 3 = technical; 4 = legal; 5 = other)TENURE: Number of years employed by the firmEXPER: Number of years as the firm CEOSALES: Sales revenues, in millions of dollarsVAL: Market value of the CEO's stock, in natural logarithm unitsPCNTOWN: Percentage of firm's market value owned by the CEOPROF: Profits of the firm, before taxes, in millions of dollars1) Create a scatterplot matrix for this dataset. Briefly comment on the observed relationships between compensationand the other variates.Note that companies with negative…
6 (Model Selection, Estimation and Prediction of GARCH) Consider the daily returns rt of General Electric Company stock (ticker: "GE") from "2021-01-01" to "2024-03-31", comprising a total of 813 daily returns. Using the "fGarch" package of R, outputs of fitting three GARCH models to the returns are given at the end of this question. Model 1 ARCH (1) with standard normal innovations; Model 2 Model 3 GARCH (1, 1) with Student-t innovations; GARCH (2, 2) with Student-t innovations; Based on the outputs, answer the following questions. (a) What can be inferred from the Standardized Residual Tests conducted on Model 1? (b) Which model do you recommend for prediction between Model 2 and Model 3? Why? (c) Write down the fitted model for the model that you recommended in Part (b). (d) Using the model recommended in Part (b), predict the conditional volatility in the next trading day, specifically trading day 814.

Chapter 6 Solutions

Introduction To The Practice Of Statistics

Ch. 6.1 - Prob. 11UYKCh. 6.1 - Prob. 12ECh. 6.1 - Prob. 13ECh. 6.1 - Prob. 14ECh. 6.1 - Prob. 15ECh. 6.1 - Prob. 16ECh. 6.1 - Prob. 17ECh. 6.1 - Prob. 18ECh. 6.1 - Prob. 19ECh. 6.1 - Prob. 20ECh. 6.1 - Prob. 21ECh. 6.1 - Prob. 22ECh. 6.1 - Prob. 23ECh. 6.1 - Prob. 24ECh. 6.1 - Prob. 25ECh. 6.1 - Prob. 26ECh. 6.1 - Prob. 27ECh. 6.1 - Prob. 28ECh. 6.1 - Prob. 29ECh. 6.1 - Prob. 30ECh. 6.1 - Prob. 31ECh. 6.1 - Prob. 32ECh. 6.1 - Prob. 33ECh. 6.1 - Prob. 34ECh. 6.1 - Prob. 35ECh. 6.1 - Prob. 36ECh. 6.1 - Prob. 37ECh. 6.2 - Prob. 38UYKCh. 6.2 - Prob. 39UYKCh. 6.2 - Prob. 40UYKCh. 6.2 - Prob. 41UYKCh. 6.2 - Prob. 42UYKCh. 6.2 - Prob. 43UYKCh. 6.2 - Prob. 44UYKCh. 6.2 - Prob. 45UYKCh. 6.2 - Prob. 46UYKCh. 6.2 - Prob. 47UYKCh. 6.2 - Prob. 48UYKCh. 6.2 - Prob. 49UYKCh. 6.2 - Prob. 50UYKCh. 6.2 - Prob. 51UYKCh. 6.2 - Prob. 52ECh. 6.2 - Prob. 53ECh. 6.2 - Prob. 54ECh. 6.2 - Prob. 55ECh. 6.2 - Prob. 56ECh. 6.2 - Prob. 57ECh. 6.2 - Prob. 58ECh. 6.2 - Prob. 59ECh. 6.2 - Prob. 60ECh. 6.2 - Prob. 61ECh. 6.2 - Prob. 62ECh. 6.2 - Prob. 63ECh. 6.2 - Prob. 64ECh. 6.2 - Prob. 65ECh. 6.2 - Prob. 66ECh. 6.2 - Prob. 67ECh. 6.2 - Prob. 68ECh. 6.2 - Prob. 69ECh. 6.2 - Prob. 70ECh. 6.2 - Prob. 71ECh. 6.2 - Prob. 72ECh. 6.2 - Prob. 73ECh. 6.2 - Prob. 74ECh. 6.2 - Prob. 75ECh. 6.2 - Prob. 76ECh. 6.2 - Prob. 77ECh. 6.2 - Prob. 78ECh. 6.2 - Prob. 79ECh. 6.2 - Prob. 80ECh. 6.2 - Prob. 81ECh. 6.2 - Prob. 82ECh. 6.2 - Prob. 83ECh. 6.2 - Prob. 84ECh. 6.2 - Prob. 85ECh. 6.2 - Prob. 86ECh. 6.2 - Prob. 87ECh. 6.2 - Prob. 88ECh. 6.2 - Prob. 89ECh. 6.3 - Prob. 90UYKCh. 6.3 - Prob. 91UYKCh. 6.3 - Prob. 92ECh. 6.3 - Prob. 93ECh. 6.3 - Prob. 94ECh. 6.3 - Prob. 95ECh. 6.3 - Prob. 96ECh. 6.3 - Prob. 97ECh. 6.3 - Prob. 98ECh. 6.3 - Prob. 99ECh. 6.3 - Prob. 100ECh. 6.3 - Prob. 101ECh. 6.3 - Prob. 102ECh. 6.3 - Prob. 103ECh. 6.3 - Prob. 104ECh. 6.3 - Prob. 105ECh. 6.3 - Prob. 106ECh. 6.3 - Prob. 107ECh. 6.3 - Prob. 108ECh. 6.3 - Prob. 109ECh. 6.4 - Prob. 110ECh. 6.4 - Prob. 111ECh. 6.4 - Prob. 112ECh. 6.4 - Prob. 113ECh. 6.4 - Prob. 114ECh. 6.4 - Prob. 115ECh. 6.4 - Prob. 116ECh. 6.4 - Prob. 117ECh. 6.4 - Prob. 118ECh. 6.4 - Prob. 120ECh. 6.4 - Prob. 119ECh. 6.4 - Prob. 121ECh. 6 - Prob. 122ECh. 6 - Prob. 123ECh. 6 - Prob. 136ECh. 6 - Prob. 125ECh. 6 - Prob. 124ECh. 6 - Prob. 126ECh. 6 - Prob. 127ECh. 6 - Prob. 128ECh. 6 - Prob. 129ECh. 6 - Prob. 130ECh. 6 - Prob. 131ECh. 6 - Prob. 132ECh. 6 - Prob. 133ECh. 6 - Prob. 134ECh. 6 - Prob. 135ECh. 6 - Prob. 137ECh. 6 - Prob. 138ECh. 6 - Prob. 139ECh. 6 - Prob. 140E
Knowledge Booster
Background pattern image
Statistics
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, statistics and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Big Ideas Math A Bridge To Success Algebra 1: Stu...
Algebra
ISBN:9781680331141
Author:HOUGHTON MIFFLIN HARCOURT
Publisher:Houghton Mifflin Harcourt
Text book image
Glencoe Algebra 1, Student Edition, 9780079039897...
Algebra
ISBN:9780079039897
Author:Carter
Publisher:McGraw Hill
Text book image
Holt Mcdougal Larson Pre-algebra: Student Edition...
Algebra
ISBN:9780547587776
Author:HOLT MCDOUGAL
Publisher:HOLT MCDOUGAL
Hypothesis Testing - Solving Problems With Proportions; Author: The Organic Chemistry Tutor;https://www.youtube.com/watch?v=76VruarGn2Q;License: Standard YouTube License, CC-BY
Hypothesis Testing and Confidence Intervals (FRM Part 1 – Book 2 – Chapter 5); Author: Analystprep;https://www.youtube.com/watch?v=vth3yZIUlGQ;License: Standard YouTube License, CC-BY