Question

In: Statistics and Probability

An economist reports that 621 out of a sample of 2,300 middle-income American households actively participate...

An economist reports that 621 out of a sample of 2,300 middle-income American households actively participate in the stock market.
a. Construct a 99% confidence interval of the proportion of middle-income Americans who actively participate in the stock market.
b. Can we conclude that the proportion of middle-income Americans that actively participate in the stock market is not 30%?

Solutions

Expert Solution

a) Confidence interval :

b) Test for single proportion:

(1) Null and Alternative Hypothesis:

H0:  the proportion of middle-income Americans that actively participate in the stock market is 30%

i.e. H0: P = 0.30

H1:  the proportion of middle-income Americans that actively participate in the stock market is not 30%

i.e. H1: P not = 0.30

Thus we conclude that the proportion of middle-income Americans that actively participate in the stock market is not 30%


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