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A random sample of 100 daily stock returns was taken. The average return in the sample...

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Statistics

A random sample of 100 daily stock returns was taken. Theaverage return in the sample appeared to be 4.81%. The populationstandard deviation is not known, but the sample standard deviationis known to be 0.9%.

a.  Calculate a 95% confidence interval for theaverage stock return

b. How big the sample size be for the margin of error of 0.1% atthe confidence level 95%?

c. A fund manager claims that the average stock return is higherthan 4.81%. Test the fund manager’s claim with the 5% level ofsignificance.

Answer & Explanation Solved by verified expert
4.0 Ratings (806 Votes)
QaQbFor big sample size we used z statisticsMargin of error critical value    See Answer
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