Unformatted text preview: reedom increases, the difference between the t distribution and the standard normal probability distribution becomes smaller and smaller. A t distribution with more degrees of freedom has less dispersion. The mean of the t distribution is zero. Slide 22 Interval Estimation of a Population Mean: SmallSample Case (n < 30) with σ Unknown
s The interval estimate is given by: x ±tα/ 2 s n where 1 α is the confidence coefficient tα /2 is the t value providing an area of α /2 in the upper tail of a t distribution with n 1 degrees of freedom s is the sample standard deviation Slide 23 s Example An investor is trying to estimate the return on investment in companies that won quality awards last year. A random sample of 25 such companies is selected, and the return on investment (in millions$) is calculated had he invested in them. Construct a 95% confidence interval for the mean return. Slide 24 Before proceed…. check the requirement….
s s s We need to check that the data is normally distributed, or at least not extremely nonnor...
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