6. A computer package was used to generate the following printout for estimating

Question

6. A computer package was used to generate the following printout for estimating the mean sale price of homes in a particular neighborhood. -sale price; SAMPLE SIZE OF X = 15; CONFIDENCE 95; SAMPLE MEAN OF X = 46,600; SAMPLE STANDARD DEV 13,747 UPPER LIMIT = 54,213.6; LOWER LIMIT- 38,986.4 Which of the following is a practical interpretation of the interval above? (a) 95% of the homes in this neighborhood have sale prices that fall between $38,986.40 and $54,213.60 (b) We are 95% confident that the true sale price of all homes in this neighborhood fall between $38,986.40 and $54,213.60. (c) We are 95% confident that the mean sale price of all homes in this neighborhood falls between $38,986.40 and $54,213.60 (d) All are correct practical interpretations of this interval.

Explanation / Answer

Solution:

It is given that confidence interval upperlimit=54213.6 and lower limit =38986.4

We are 95% confident that our true sales are lies between these intervals.

Hence (c) are correct.

We are 95% confident that the mean sale price of all homes in this neighborhood falls between $38,986.40 and $54,213.60.

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