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Unformatted text preview: Chapter 8 Interval Estimation / Confidence Intervalsthis is the technique used when we use a point estimator (sample estimate) to construct an interval where we expect to find the population parameter with a certain probability. To do this we need to have a sample estimate and we need to specify what degree of certainty we want to know that the actual population parameter lies in the interval. 1. Statistical Inference using sample data and estimates to draw a conclusion about the population. 2. Interval Estimate this is when we construct an interval by adding or subtracting a margin of error to a point estimate. Mathematically: Point Estimate margin of error Note: _ x & _ p are examples of point estimates commonly used. 3. Interval Estimation about a Population Mean (Large Sample; n 30) a. sampling error tells us how close the population parameter is to the sample estimate. Mathematically:  _ x note that since most likely the population parameter is unknown we cant say for sure how far away we are from the actual mean, but we can construct a sampling distribution and make probability statements about it assuming that we have a normal distribution. b. precision statement tells us with what precision the sampling error will take. So the sampling error ( _ x ) takes on some error (it could be less) with a certain probability. Mathematically: _ x z /2 _ x Note: our margin of error here is the z /2 _ x ; so we are within some standard deviations away from the mean. c. Confidence Coefficient & Precision Terms i. confidence level the precision which you make the particular intervals i.e. 95% or some percentage ii. confidence coefficient the actual percent level used iii. level of significance tells use the chance that we are not in the confidence interval. We can take 1 confidence level = . We can take 1 confidence level = ....
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This note was uploaded on 12/04/2011 for the course ACCT 3311 taught by Professor Smith during the Spring '10 term at University of the Incarnate Word.
 Spring '10
 smith
 Accounting

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