Question 1183459: The average divided yield of a random sample of 25 JSE-listed companies this year was found to be 14.5% with a sample standard deviation of 3.4%. Assume that dividend yields are normally distributed.
(a) Calculate, with 90% confidence, the actual mean dividend yield of all JSE- listed companies this year. Interpret the finding
(b) Calculate, with 95% confidence, the actual mean dividend yield of all JSE- listed companies this year. Compare the interval with the one calculated in 3.1.1
Answer by Boreal(15235)   (Show Source):
You can put this solution on YOUR website! the half-interval for 90% CI is z(0.95)*sigma/sqrt(n)
=1.645*3.4/sqrt(25)
=1.12
the interval is (13.4, 15.6) % yield units.
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for 95% confidence z=1.96
the half- interval is 1.33
the interval is (13.2, 15.8) same units
More confidence, wider interval
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