Question

DEBT	ROA	CURRENT	ASSET	BANKRUPT
-0.58	0.14	5.06	0.13	No
0.12	0.11	1.14	0.17	No
-0.23	-0.30	0.33	0.28	Yes
0.48	0.19	1.24	0.18	No
0.16	0.05	2.01	0.20	No
0.07	0.02	1.31	0.25	Yes
-0.07	-0.09	1.45	0.26	Yes
-0.14	-0.03	0.46	0.26	No
0.15	0.05	1.88	0.27	No
-0.14	-0.07	0.71	0.28	Yes
0.20	-0.08	1.59	0.30	No
0.19	0.15	2.25	0.33	No
0.07	-0.01	1.37	0.34	Yes
0.38	-0.11	3.27	0.35	Yes
-0.02	0.02	2.05	0.35	No
0.37	0.11	1.99	0.38	Yes
-0.29	0.06	-1.84	0.38	No
0.06	-0.02	1.01	0.40	Yes
-0.07	-0.06	1.37	0.40	Yes
0.22	0.08	2.35	0.40	No
-0.08	-0.08	1.51	0.42	Yes
-0.14	-0.14	1.42	0.43	Yes

b. Construct a 90% confidence interval for the average ROA of firms that remained solvent. State the confidence interval in the two forms: point estimate ± margin of error and [lower limit, upper limit]. Interpret the confidence interval within the context of the problem.

c. Construct a 90% confidence interval for the average ROA of firms that went bankrupt. State the confidence interval in the two forms: point estimate ± margin of error and [lower limit, upper limit]. Interpret the confidence interval within the context of the problem.

Answer 1