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# Point estimates and margins of error

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According to Thomson Financial, through January 25, 2006, the majority of companies reporting profits had beaten estimates (Business Week, February 6, 2006). A sample of 162 companies showed 104 beat estimates, and 29 fell short.

a. What is the point estimate of the proportion that fell short of estimates ?

b. Determine the margin of error and provide a 95% confidence interval for the proportion that beat estimates.

c. How large a sample is needed if the desired margin of error is .05?

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The following posting helps with problems involving point estimates and margins of error. Calculations involve point estimates, margin of error and sample size.

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According to Thomson Financial, through January 25,2006, the majority of companies reporting profits had beaten estimates(Business Week, February 6, 2006). A SAMPLE OF 162 companies showed 104 beat estimates, and 29 fell short.

a. What is the point ...

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• BSc , Wuhan Univ. China
• MA, Shandong Univ.
###### Recent Feedback
• "Your solution, looks excellent. I recognize things from previous chapters. I have seen the standard deviation formula you used to get 5.154. I do understand the Central Limit Theorem needs the sample size (n) to be greater than 30, we have 100. I do understand the sample mean(s) of the population will follow a normal distribution, and that CLT states the sample mean of population is the population (mean), we have 143.74. But when and WHY do we use the standard deviation formula where you got 5.154. WHEN & Why use standard deviation of the sample mean. I don't understand, why don't we simply use the "100" I understand that standard deviation is the square root of variance. I do understand that the variance is the square of the differences of each sample data value minus the mean. But somehow, why not use 100, why use standard deviation of sample mean? Please help explain."
• "excellent work"
• "Thank you so much for all of your help!!! I will be posting another assignment. Please let me know (once posted), if the credits I'm offering is enough or you ! Thanks again!"
• "Thank you"
• "Thank you very much for your valuable time and assistance!"

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