FORESTRY
AGRICULTURAL STATISTICS AND ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A 90% confidence interval for the average salary of all CEOs in the electronics industry was constructed using the results of a random survey of 45 CEOs. The interval was ($139, 048, $154, 144). Give a practical interpretation of the interval.
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90% of the sampled CEOs have salaries that fell in the interval $139, 048 to $154, 144
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We are 90% confident that the mean salary of all CEOs in the electronics industry falls in the interval $139, 048 to $154, 144.
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90% of all CEOs in the electronics industry have salaries that fall between $139, 048 to $154, 144
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We are 90% confident that the mean salary of the sampled CEOs falls in the interval $139, 048 to $154, 144.
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Explanation:
Detailed explanation-1: -With a 90 percent confidence interval, you have a 10 percent chance of being wrong. A 99 percent confidence interval would be wider than a 95 percent confidence interval (for example, plus or minus 4.5 percent instead of 3.5 percent).
Detailed explanation-2: -A 90% confidence level means that we would expect 90% of the interval estimates to include the population parameter; a 95% confidence level means that 95% of the intervals would include the parameter; and so on.
Detailed explanation-3: -A 90% confidence interval has a z-score (a critical value) of 1.645. In conclusion, the margin of error is 2.52%.
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