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    Confidence interval for the population mean: Use of the t distribution

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    A certain brokerage house wants to estimate the mean daily return on a certain stock. A random sample of 17 days yields the following return percentages:

    1.87
    2.94
    1.39
    -1.29
    -0.51
    -2.9
    -2.83
    1.11
    1.43
    -1.88
    0.79
    -0.97
    1.13
    -1.13
    -2.95
    1.49
    -1.57

    If we assume that the returns are normally distributed, find a 90% confidence interval for the mean daily return on this stock. Then complete the table below.

    Carry your intermediate computations to at least three decimal places. Round your answers to one decimal place.

    What is the lower limit of the confidence interval?
    What is the upper limit of the confidence interval?

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    Solution Summary

    A certain brokerage house wants to estimate the mean daily return on a certain stock. A random sample of 17 days yields the following return percentages:

    1.87
    2.94
    1.39
    -1.29
    -0.51
    -2.9
    -2.83
    1.11
    1.43
    -1.88
    0.79
    -0.97
    1.13
    -1.13
    -2.95
    1.49
    -1.57

    If we assume that the returns are normally distributed, find a 90% confidence interval for the mean daily return on this stock. Then complete the table below.

    Carry your intermediate computations to at least three decimal places. Round your answers to one decimal place.

    What is the lower limit of the confidence interval?
    What is the upper limit of the confidence interval?

    $2.49

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