Q1. The following data are from a simple random sample.

5 8 10 7 10 14
a. What is the point estimate of the population mean?
b. What is the point estimate of the population standard deviation?

Data set
5 Pop Size N? don't
8 Pop type don't
10 n 6
7
10 s = sqrt((x-mean)power 2/(n-1))
14
PEPoint Estmate 9
Point Estimate of SD 3.1
 Population Sample

-mean)power 2/(n-1))
 54
x   xi / n  9
6

( xi  x ) 2
b. s
n 1

( xi  x ) 2 = (-4)2 + (-1)2 + 12 (-2)2 + 12 + 52 = 48

48
s=  31
.
6 1
Q2. A survey question for a sample of 150 individuals yielded 75 Yes responses, 55 No
responses, and 20 No Opinions.
a. What is the point estimate of the proportion in the population who respond Yes?
b. What is the point estimate of the proportion in the population who respond No?

Total 150 random sample

Yes 75 0.5 Pt estimate of proption - 'Y" = 75/150
No 55 0.366667
No opinion 20 0.133333
a. p = 75/150 = .50

b. p = 55/150 = .3667
Q3. A sample of 5 months of sales data provided the following information: Month: 1 2 3 4 5
Units Sold: 94 100 85 94 92
a. Develop a point estimate of the population mean number of units sold per month.
b. Develop a point estimate of the population standard deviation.

Months Units Sold x-mean (x-mean)*2

1 94
2 100
3 85
4 94
5 92
mean 93
sd 5.385
 465
a. x  xi / n   93
5
b.
xi ( xi  x ) ( xi  x ) 2
94 +1 1
100 +7 49
85 -8 64
94 +1 1
92 -1 1
Totals 465 0 116

( xi  x ) 2 116
s   5.39
n 1 4
Q4. BusinessWeek published information on 283 equity mutual funds (BusinessWeek, January
26, 2004). A sample of 40 of those funds is contained in the data set Mutual Fund. Use the data set to answer the fo
a. Develop a point estimate of the proportion of the BusinessWeek equity funds that are load funds.
b. Develop a point estimate of the proportion of funds that are classified as high risk.
c. Develop a point estimate of the proportion of funds that have a below-average risk rating.

PopulationN 283
sample n 40

a point estimate (18/40) 0.45

b point estimate ( 6 / 40) 0.15
c both (18/40) 0.45
 FUND Load/No Load Risk Level
AIM Opportunities II A Load Average
Alpine U.S. Real Est. Equity Y No load Average
e the data set to answer the following questions. Am. Century Value Inv. No load Low
are load funds. Atalanta/Sosnoff No load Average
Bjurman Micro Cap Growth No load Average
Brazos Micro Cap Y No load High
Bruce No load Low
CNI Charter RCB Small Cap. VLoad Low
Clipper No load Very low
Columbia Acorn Z No load Low
Delaware Emerging Markets Load Average
Dreyfus Premier Emerging MkLoad Average
Eaton Vance Emerging Mkts Load Average
Evergreen Precious Metals HlLoad High
Exeter Tax Managed A No load Low
Federated Capital Appreciati Load Average
First Eagle Overseas A Load Very low
Fremont U.S. Micro Cap No load High
Goddman Sachs Small Cap VaLoad Low
Growth Fund of America A Load Average
Hotchkis & Wiley Mid Cap ValLoad Low
Icon Energy No load Average
Invesco Energy Inv. No load Average
Janus Advisor Growth & Inco No load Average
Mutual Discovery Z No load Very low
Nuveen NWQ Multi Cap ValueNo load Low
Oppenheimer Developing MarLoad Average
Phoenix-Duff & Phelps Real EsLoad Very low
T. Rowe Price Capital AppreciNo load Very low
Prudent Bear No load High
RS Global Natural Resources No load Low
Security Mid Cap Value A Load Low
Smith Barney Security & Gro Load Very low
Strong Large Company Growth No load Average
TCW Galileo Opportunity N Load Low
Thompson Plumb Balanced No load Low
Touchstone Emerging GrowthLoad Average
U.S. Global Accolade Eastern No load Average
USAA Precious Metals & MineNo load High
Van Eck International InvestoLoad High
Risk Level High
Load/No Load - all -

FUND Count - Load/No Load

Brazos Micro Cap Y 1
Evergreen Precious Metals Hlds. A 1
Fremont U.S. Micro Cap 1
Prudent Bear 1
USAA Precious Metals & Minerals 1
Van Eck International Investors Gold A 1
Total Result 6
a. Eighteen of the 40 funds in the sample are load funds. Our point estimate is

18
p  .45
40
b. Six of the 40 funds in the sample are high risk funds. Our point estimate is

6
p  .15
40
c. The below average fund ratings are low and very low. Twelve of the funds have a rating of low

18
p  .45
40
the funds have a rating of low and 6 have a rating of very low. Our point estimate is
Many drugs used to treat cancer are expensive. BusinessWeek reported on the cost per treatment of Herceptin, a d
Typical treatment costs (in dollars) for Herceptin are provided by a simple random sample
of 10 patients.
4376 5578 2717 4920 4495
4798 6446 4119 4237 3814
a. Develop a point estimate of the mean cost per treatment with Herceptin.
b. Develop a point estimate of the standard deviation of the cost per treatment with
Herceptin.

Treatment Cost
4376
5578
2717
4920
4495
4798
6446
4119
4237
3814
per treatment of Herceptin, a drug used to treat breast cancer (BusinessWeek, January 30, 2006).
 $45,500
a. x  xi / n   $4,550
10

( xi  x ) 2 9, 068, 620
b. s   $1003.80
n 1 10  1
A sample of 426 U.S. adults age 50 and older were asked how important a variety of issues
were in choosing whom to vote for in the 2012 presidential election (AARP Bulletin, March 2012).
a. What is the sampled population for this study?
b. Social Security and Medicare was cited as “very important” by 350 respondents. Estimate
the proportion of the population of U.S. adults age 50 and over who believe this issue is very important.
c. Education was cited as “very important” by 74% of the respondents. Estimate the number of respondents who be
d. Job Growth was cited as “very important” by 354 respondents. Estimate the proportion of U.S. adults age 50 and
e. What is the target population for the inferences being made in parts (b) and (d)? Is it the same as
the sampled population you identified in part (a)? Suppose you later learn that the sample was
restricted to members of the American Association of Retired People (AARP). Would you still feel
the inferences being made in parts (b) and (d) are valid? Why or why not?

a adults that are 50 years of age or older is ….....having …

b 0.821596
c 315.24
d
e
March 2012).

is very important.
umber of respondents who believe this issue is very important.
rtion of U.S. adults age 50 and over who believe job growth is very important.
it the same as

you still feel

a. The sampled population is U. S. adults that are 50 years of age or older.

b. We would use the sample proportion for the estimate of the population proportion.
350
p  .8216
426
c. The sample proportion for this issue is .74 and the sample size is 426.

The number of respondents citing education as “very important” is (.74)426 = 315.

d. We would use the sample proportion for the estimate of the population proportion.

354
p  .8310
426

e. The inferences in parts (b) and (d) are being made about the population of U.S. adults
age 50 or older. So, the population of U.S. adults who are age 50 or older is the targe
population. The target population is the same as the sampled population. If the samp
population was restricted to members of AARP who were 50 years of age or older, the
population would not be the same as the target population. The inferences made in pa
(d) would only be valid if the population of AARP members age 50 or older was repre
of the U.S. population of adults age 50 and over.
r older.

population proportion.

ize is 426.

tant” is (.74)426 = 315.

population proportion.

e population of U.S. adults who are

age 50 or older is the target
ed population. If the sampled
0 years of age or older, the sampled
The inferences made in parts (b) and
s age 50 or older was representative
A population has a mean of 200 and a standard deviation of 50. A sample of size 100 will
be taken and the sample mean will be used to estimate the population mean.
a. What is the expected value of ?
b. What is the standard deviation of ?
c. Show the sampling distribution of .
d. What does the sampling distribution of show?

E( Mu 200

SD sigma/sqrt(n) 5

normal distribution (200, 5)

probl distrbution of all possible sample means that can be observed with random sample of size 100, to compute th
of size 100, to compute the prob that mean is within the specified limts +- 5
a. E ( x )    200

b.  x   / n  50 / 100  5

c. Normal with E ( x ) = 200 and  x = 5

d. It shows the probability distribution of all possible sample means that can be observed with
random samples of size 100. This distribution can be used to compute the probability that x is
within a specified  from 
 can be observed with
e the probability that x is
Q8. A population has a mean of 200 and a standard deviation of 50. Suppose a sample of size
100 is selected and is used to estimate μ.
a. What is the probability that the sample mean will be within + - 5 of the population mean?
b. What is the probability that the sample mean will be within + - 10 of the population mean?

Normal distribution N(mean, sd)

Expected Mean 200
SD 5

a Prob(195<=mean<=205) = Prob(-1<=z<=1) 0.8413-0.1587 68%

x1 z1 x2 z2
195

b Prob(190<=mean<=210) 95%
a. The sampling distribution is normal with

E ( x ) =  = 200

 x   / n  50 / 100  5

For 5, 195  x  205

Using Standard Normal Probability Table:

x  5
At x = 205, z   1 P ( z  1) = .8413
x 5

x   5
At x = 195, z    1 P ( z  1) = .1587
x 5

P (195  x  205) = .8413 - .1587 = .6826

b. For  10, 190  x  210

Using Standard Normal Probability Table:

x   10
At x = 210, z   2 P ( z  2) = .9772
x 5

x  10
At x = 190, z    2 P ( z  2) = .0228
x 5

P (190  x  210) = .9772 - .0228 = .9544

 Q9. Assume the population standard deviation is σ = 25. Compute the standard error of the
Mean , for sample sizes of 50, 100, 150, and 200. What can you say about the size of
the standard error of the mean as the sample size is increased?

25

n
50 3.535534 st error of means decreasing as the sample size increasing
100 2.5
150 2.041241
200 1.767767
x  / n

 x  25 / 50  3.54

 x  25 / 100  2.50

 x  25 / 150  2.04

 x  25 / 200  1.77

The standard error of the mean decreases as the sample size increases.
Q10. Suppose a random sample of size 50 is selected from a population with σ _ 10. Find the
value of the standard error of the mean in each of the following cases (use the finite population
correction factor if appropriate).
a. The population size is infinite.
b. The population size is N = 50,000.
c. The population size is N = 5000.
d. The population size is N = 500.
a.  x   / n  10 / 50  141
.

b. n / N = 50 / 50,000 = .001

Use  x   / n  10 / 50  141
.

c. n / N = 50 / 5000 = .01

Use  x   / n  10 / 50  141
.

d. n / N = 50 / 500 = .10

N n  500  50 10
Use  x    134
.
N 1 n 500  1 50

Note: Only case (d) where n /N = .10 requires the use of the finite population correction factor.
correction factor.