rmins_lab_8 - IOE 265 Fall 07 November 8 2007 Lab 8...

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IOE 265 – Fall 07 November 8, 2007 Note: Please make sure you type in your answers in the spaces provided and submit this file electronically via the CTools website under Assignments. Save this file as ‘ uniqname _lab_8’ with your own uniqname. So far we have used point estimators in order to estimate an unknown parameter. Now we want to see how reliable the estimator is. In other words, we want to see how it will change if we repeat the sampling. An alternative to reporting a single value for the parameter being estimated is to calculate and report an entire interval of plausible values – a confidence interval (CI). A confidence level is a measure of the degree of reliability of the interval. Population Standard Deviation (σ) known Open ‘Lab_8_Data.xls’, and look at the first tab (Normal CI), which provides 40 observations of a variable that is known to be normally distributed with σ = 1: 1. Press F9 to refresh the random numbers, taking note of how often the confidence interval of X-bar (the sample average) captures the true mean of the distribution. Approximately how often does the true mean fall outside of that interval? (0.5 point) 2. Now, using the above result as a guide, write (in your own words) a definition of what exactly a confidence interval tells us: (1 point) 3. If we are unhappy with the width of the confidence interval and would like to reduce it, what are the 3 things we can do?
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