Chapter 11 Problem # 7.docx - Chapter 11 Problem 7 Part(a...

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Chapter 11 Problem # 7 Part (a) For a sample of n=8 quarterly percent total returns for General Electric, the sample mean quarterly percent total return is computed as X = Σx/n = 20.0 + (-20.5) +15.3 / 8 = 25.6/ 8 = 3.2 The sample mean X = 3.2 is the balancing point in the distribution. Part (b) For a sample of n=8 quarterly percent total returns for General Electric, the sample variance for the quarterly percent total return is computed as X = Σ(xi-x)/n-1 =1773.68-1 =253.371429. Therefore, sample standard deviation for the quarterly percent total return for General Electric is s = 253.371429 = 15.917645
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Part (c) If a simple random sample of size n is taken from a normal population, an interval estimate of a population variance is given as follows: For a 95% confidence interval, the confidence coefficient is 1=.-95. N = 8, n-1 = 8-17 degrees of freedom. According to the chi-square distribution table, with 7 degrees of freedom and an area of a/2 = .05/2 =.025 in the upper tail, x is = 16.013.
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