Tutorial 8

Construct a 95 condence interval for p 2 an opinion

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Unformatted text preview: 2. An opinion poll is requested to estimate the proportion (p) of her constituents who favour the discrimination of certain narcotics violations. How large a sample will be needed to be able to assert with 95% confidence that the error of estimation is no more than 0.03, if (a) the poll has no idea about p, (b) there are reasons to believe that p will be approximately 0.25? 3. Past experience has shown that 10% of the recipients of loans from a particular mortgage-lending institution default on their mortgarge within the first 3 years. The mortgage company has observed, however, that the proportion of default seems to be increasing. If evidence can be obtained that the proportion of customers who default on their mortgage is now greater than 0.1, the company will review and revise its guidelines for granting mortgages. A random sample of 200 customers who received loan 3 years ago indicated that 30 of them defaulted on their mortgage. Test at 1% significance level whether there is sufficient evidence indicating that the proportion of default is on the increase. 3 4...
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