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  3. 3. [10 marks] a sample survey of 54 discount broke

3. [10 marks] A sample survey of 54 discount brokers showed that the mean price charged for a trade...

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Basic Math

3.[10 marks] Asample survey of 54 discount brokers showed that the meanprice charged for a

trade of 100shares at $50 per share was $33.77 and a sample standard deviationof $15.

a.   [3] Develop a 95% confidence interval forthe mean price charged by discount brokers for a trade of 100shares at $50 per share.

b.    [2]Explain, in context, what the interval you found tellsyou.

c.     [3]What sample size would be necessary to achieve a margin oferror of $2? Assume a

confidencelevel of 95%.

d.    [2]Three years ago the mean price charged for a trade of 100shares at $50 per share was

$39.25. Hasthe price dropped significantly? Justify.

Answer & Explanation Solved by verified expert
4.1 Ratings (709 Votes)
3 a For the given sample where population standard deviationis not given we use Tdistribution soThe confidence interval is calculated as M tsMwhereM sample meant t statistic determined by the    See Answer
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