Problem

The average daily volume of a computer stock in 2011 was qt = 35 1 million shares, according to a reliable source A stock analyst believes that the stock volume in 2018 is different from the 2011 level Based on a
random sample of 40 trading days in 2018, he finds the sample mean to be 26.8 million shares, with a standard deviation of s = 13 5 million shares. Test the hypotheses by constructing a 95% confidence interval
(b) Construct a 95%confidence interval about the sample mean of stocks traded in 2018

Answer

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Answer

Final Answer: The 95% confidence interval for the mean number of stocks traded in 2018 is \(\boxed{(22.62, 30.98)}\) million shares.

Steps

Step 1 :Given that the average daily volume of a computer stock in 2011 was 35 million shares. A stock analyst believes that the stock volume in 2018 is different from the 2011 level. Based on a random sample of 40 trading days in 2018, he finds the sample mean to be 26.8 million shares, with a standard deviation of 13.5 million shares.

Step 2 :We are asked to construct a 95% confidence interval about the sample mean of stocks traded in 2018.

Step 3 :To construct a 95% confidence interval for the mean, we can use the formula for a confidence interval which is: \(\bar{x} \pm z*\frac{s}{\sqrt{n}}\)

Step 4 :In this formula, \(\bar{x}\) is the sample mean, \(z\) is the z-score corresponding to the desired confidence level (for a 95% confidence interval, \(z = 1.96\)), \(s\) is the standard deviation of the sample, and \(n\) is the sample size.

Step 5 :In this case, \(\bar{x} = 26.8\), \(s = 13.5\), and \(n = 40\). We can plug these values into the formula to find the confidence interval.

Step 6 :First, calculate the margin of error: \(margin\_of\_error = z*\frac{s}{\sqrt{n}} = 1.96*\frac{13.5}{\sqrt{40}} = 4.183693344402766\)

Step 7 :Then, calculate the lower bound of the confidence interval: \(lower\_bound = \bar{x} - margin\_of\_error = 26.8 - 4.183693344402766 = 22.616306655597235\)

Step 8 :Finally, calculate the upper bound of the confidence interval: \(upper\_bound = \bar{x} + margin\_of\_error = 26.8 + 4.183693344402766 = 30.983693344402766\)

Step 9 :Final Answer: The 95% confidence interval for the mean number of stocks traded in 2018 is \(\boxed{(22.62, 30.98)}\) million shares.

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