Test_3_Review_with_KEY

Test_3_Review_with_KEY - Review for Test 3 (Chapters 6...

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Review for Test 3 (Chapters 6 & 7) 1. What are the correct notations for both the population parameter and the sample statistic for the following: mean, proportion, variance, and standard deviation? What distribution is appropriate for use with each parameter (assume the populations are normally distributed and the sample is small for the mean). 2. A NAPA Auto Parts supplier wants information about how long car owners plan to keep their cars. A simple random sample of 25 car owners results in x = 7.01 years and s = 3.74 years, respectively (based on data from a Roper poll). Assume that the sample is drawn from a normally distributed population. a. Find and interpret a 95% confidence interval estimate of the population mean. b. Find and interpret a 95% confidence interval estimate of the population standard deviation. 3. The tobacco industry closely monitors all surveys that involve smoking. One survey showed that among 785 randomly selected subjects who completed 4 years of college, 18.3% smoke. a. Construct the 98% confidence interval for the true percentage of smokers among all people who completed four years of college. b. Based on the result from part (a), does the smoking rate for those with four years of college appear to be substantially different than the 27% rate for the general population? Population Parameter Sample Statistic Distribution Mean Proportion Variance Standard Deviation
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4. A study was conducted to estimate hospital costs for accident victims who wore seat belts. Twenty randomly selected cases have a distribution that appears to be bell-shaped with a mean of $9004 and a standard deviation of $5629. a. Construct the 99% confidence interval for the mean of all such costs. b. If you are a manager for an insurance company that provides lower rates for drivers who wear seat belts and you want a conservative estimate for a worst case scenario, what amount should you use as the possible hospital cost for an accident victim who wears seat belts? 5.
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This note was uploaded on 10/22/2011 for the course ACCT 3551 taught by Professor Brown during the Spring '11 term at UNC.

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Test_3_Review_with_KEY - Review for Test 3 (Chapters 6...

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