[Delimiter]

[General guidance]

[Section: Concepts and reason]

The concept used in this situation is Chi-Square distribution.

The Chi-Square distribution is one of the distribution of analysis of categorical data with
k degrees of freedom and sum of the squares of k independent standard normal random
variables.

[Section: Fundamentals]

The Excel’s formula for calculating the Chi-Square critical value is,

 CHIINV  , df 

The formula for the calculate 100 1    % confidence interval for variance is,

 n  1 s 2   2   n  1 s 2
2 / 2 2 
1
2

[Delimiter]

[Starting Hint]

Use Excel’s formula to calculate the critical values of Chi-Square.

[Delimiter]

[Step 1]

The calculation of mean and variance is as follows:

1
x
n
 xi
1 1.05  1.03  0.98  1  
  
8  0.99  0.97  1.01  0.96 
7.99

8
 1.00

1
  xi  x 
2
s2 
n 1
1 
1.05  0.999   ...   0.96  0.999  
2 2

8 1  
0.0065

7
 0.0009

The degrees of freedom is,

df  n  1
 8 1
7

The level of confidence is 0.90

The level of significance is 0.10

The critical value of Chi-Square for 10% level of significance is,

   0.10   
2 / 2  14.0671  Since using Excel's formula   CHIINV  2 ,7   
   

The critical value of Chi-Square for 90% confidence is,

   0.10   
12 / 2  2.1673  Using Excel's   CHIINV 1  2 ,7   
   

[Explanation]

The calculated Chi-Square critical value for 10% level of significance is 14.0671
The calculated Chi-Square critical value for 90% confidence level is 2.1673
These values are obtained as putting the half of the level of significance and one minus
half of the level of significance along with degrees of freedom.

[Hint for next step]

Use confidence interval formula for variance to calculate the 90% confidence interval for
variance.

[Delimiter]

[Step 2]

The calculation of the 90% confidence interval is,

CI 
 n  1 s 2 2 
 n  1 s 2
2 / 2 2 
1
2


8  1 0.0009    2  8  1 0.0009 
14.0671 2.1673
7  0.0009 7  0.0009
 2 
14.0671 2.1673
 0.0004    0.0029
2

[Answer]

The 90% confidence interval for population variance is  0.0004,0.0029 

[Answer End]

[Answer Choice: Wrong]

The 90% confidence interval for population variance is  0.0005,0.0028

[Answer Choice End]

[Answer Choice: Wrong]

The 90% confidence interval for population variance is  0.0009,0.0024 

[Answer Choice End]

[Answer Choice: Correct]

The 90% confidence interval for population variance is  0.0004,0.0029 

[Answer Choice End]

[Answer Choice: Wrong]

None of the answer choices are correct.

[Answer Choice End]

[Explanation]

The 90% confidence interval for population variance is  0.0004,0.0029 

These values are obtained as the multiplied values of one minus sample size into the
population variance and the resulted value dividing with the chi-square critical values.