ANZ Bank's Wealth Management Division conducted a survey of the value of the new business created...

ANZ Bank's Wealth Management Division conducted a survey of the value of the new business created over the last month in millions of dollars. From 23 responses, the mean and standard deviation were found to be $1.721 and $0.639 million respectively. Assuming the data were collected through a random sample and that the value of new business is approximately normally distributed, calculate a 95% confidence interval estimate of the average value of new business per month in millions of dollars. State only the upper bound correct to three decimal places.

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Expert Solution

Solution:

Confidence interval, CI = mean value -/+ z-score*(standard deviation/sample size^(1/2))

Z-score for 95% confidence level = 1.96

So, CI = 1.721 -/+ 1.96*(0.639/(23)^(1/2))

CI = 1.721 -/+ 1.96*0.133

CI = 1.721 -/+ 0.261

The upper bound is identified with plus part of CI, so required upper bound = 1.721 + 0.261 = 1.982

Rahul Sunny answered 1 year ago

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