You are interested in getting an investment portfolio started with any extra mon

Question

You are interested in getting an investment portfolio started with any extra money you make from your part time job while also going to school. While flipping through the latest edition of Money magazine, you read an article that of a survey of magazine subscribers, 193 were randomly selected and analyzed. A 90% confidence interval was constructed for the proportion of all subscribers who made money in the previous year in their investments, which was ( 0.7505 , 0.8453 ). What is the correct interpretation of this confidence interval?

1) We are 90% confident that the proportion of all Money magazine subscribers sampled that made money in the previous year from their investments is between 0.7505 and 0.8453.

2) We are 90% confident that of the 193 respondents, between 0.7505 and 0.8453 of them made more than they lost.

3) We cannot determine the proper interpretation of this interval.

4) We are certain that 90% of subscribers made between 0.7505 and 0.8453.

5) We are 90% confident that the proportion of all Money magazine subscribers that made money in the previous year from their investments is between 0.7505 and 0.8453.

Suppose you work for a pharmaceutical company that is testing a new drug to treat ulcerative colitis. You conduct a random sample of 30 patients on the new drug and 12 of them indicated a decrease in symptoms since starting the drug regimen. You construct a 90% confidence interval for this proportion to be ( 0.2533 , 0.5467 ). What is the correct interpretation of this confidence interval?

1) We are 90% confident that the proportion of patients surveyed that have experienced a reduction in symptoms is between 0.2533 and 0.5467.

2) We cannot determine the proper interpretation of this interval.

3) We are 90% confident that the proportion of patients who should be on this drug is between 0.2533 and 0.5467.

4) We are certain that 90% of patients will be between 0.2533 and 0.5467.

5) We are 90% confident that the proportion of all patients on the drug regimen that have experienced a reduction in symptoms is between 0.2533 and 0.5467.

Explanation / Answer

1) Note that a confidence interval is for all the population, not just the sample.

Hence,

OPTION 5: We are 90% confident that the proportion of all Money magazine subscribers that made money in the previous year from their investments is between 0.7505 , 0.8453 .

2) Option 5

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