The monthly closing stock prices (rounded to the nearest dollar) for Panera Brea
ID: 3149676 • Letter: T
Question
The monthly closing stock prices (rounded to the nearest dollar) for Panera Bread Co. for the first six months of 2010 are reported in the following table. Use Table 2.
Months Closing Stock Price
January 2010 $88
February 2010 87
March 2010 85
April 2010 86
May 2010 83
June 2010 82
SOURCE: http://finance.yahoo.com.
a. Calculate the sample mean and the sample standard deviation. (Round intermediate calculations to 4 decimal places and "sample mean" and "sample standard deviation" to 2 decimal places.)
Sample mean
Sample standard deviation
b. Compute the 95% confidence interval for the mean stock price of Panera Bread Co., assuming that the stock price is normally distributed. (Round "t" value to 3 decimal places, and final answers to 2 decimal places.)
Confidence interval _______to_______
c. What happens to the margin of error if a higher confidence level is used for the interval estimate?
O The margin of error increases as the confidence level increases.
O The margin of error decreases as the confidence level increases.
Explanation / Answer
Mean(x)=85.17 Standard deviation( sd )=2.31
Confidence Interval For t- Single Mean CI = x t a/2 * (sd/ Sqrt(n)) Where, x = Mean sd = Standard Deviation a = 1 - (Confidence Level/100) ta/2 = t-table value CI = Confidence Interval Mean(x)=85.17 Standard deviation( sd )=2.31 Sample Size(n)=6 Confidence Interval = [ 85.17 t a/2 ( 2.31/ Sqrt ( 6) ) ] = [ 85.17 - 2.571 * (0.9431) , 85.17 + 2.571 * (0.9431) ] = [ 82.7454 , 87.5946 ]
The margin of error decreases a confidence level increases. The margin of error increases as the confidence level increases
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