In 2011, when the Gallup organization polled investors, 31%rated gold the best long-term investment. But in April of 2013Gallup surveyed a random sample of U.S. adults. Respondents wereasked to select the best long-term investment from a list ofpossibilities. Only 238 of the 950 respondents chose gold as thebest long-term investment. By contrast, only 92 chose bonds.
a. Compute the standard error for each sample proportion.Compute and describe a 95% confidence interval in the context ofthe question.
b. Do you think opinions about the value of gold as a long-terminvestment have really changed from the old 31% favorability rate,or do you think this is just sample variability? Explain.
c. Suppose we want to increase the margin of error to 5%, whatis the necessary sample size?
d. Based on the sample size obtained in part c, suppose 112respondents chose gold as the best long-term investment. Computethe standard error for choosing gold as the best long-terminvestment. Compute and describe a 95% confidence interval in thecontext of the question.
e. Based on the results of part d, do you think opinions aboutthe value of gold as a long-term investment have really changedfrom the old 31% favorability rate, or do you think this is justsample variability? Explain.
