Question 1187131: The Chief Economist of Analytics Financial Investments Services (AFIS) Pty Ltd, Prof. Elvis found the average dividend yield of a random sample of 30 listed companies on the Johannesburg Stock Exchange to be 11.5% with a standard deviation of 3.5%. Assuming that the dividend yields are normally distributed, compute, with 90% confidence interval, the actual dividend yield of all listed companies on the Johannesburg Stock Exchange (JSE) last year. Interpret the findings in relation to the confidence interval you have obtained.
Answer by Boreal(15235)   (Show Source):
You can put this solution on YOUR website! half-interval for 90% t-distribution is t(0.95, df=20)*s/sqrt(In)
=1.699*3.5/sqrt(30)
=1.086
the interval is (10.41%, 12.59%)
We are 90% confident that the true value of the yield of all the listed companies lies within this interval.
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