Austin Wen
STAT4260 HW9
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7.1 Suppose that a home mortgage company has N mortgages numbered serially in the
order that they were granted over a period of 20 years. There is a generally increasing trend in
the unpaid balances because of the rising cost of housing over the years. The company wishes
to estimate the total amount of unpaid balances. Should you employ a systematic or a simple
random sample? Why?
Since the company has them already listed in numbers, it can do the estimation in simple
random sample to avoid any possibilities that the way the company numbered the mortgage is
not random which might leaves to biased systematic sampling.
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7.2 A corporation lists employees by income brackets (alphabetically within brackets)
from highest to lowest. If the objective is to estimate average income per employee, should
systematic, stratified, or simple random sample be use.
The stratified random sampling would be the best for this situation because we can stratify the
population by its brackets to sample based on the information we already have. Systematic is
always the easiest one, but its conclusion can be really biased if we accidently systematic
sample the population based on its pattern. Simple random sample, as the name has suggested:
simple However, simple random sample treats every unit equally, but there is most be less
people is the higher brackets than the lower ones. So simple random sample has a high chance
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 Spring '11
 Staff
 Simple random sample, Austin Wen

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