Question

A researcher is calculating a confidence interval. All other things being constant, what happens to the width of confidence interval when the confidence level is increased?

Decreases

Increases

May increase or decrease

Remain the same

Answer #1

A researcher is calculating a confidence interval. All other things being constant, what happens to the width of confidence interval when the confidence level is increased?

**Answer : Increases**

# Increasing the confidence level increases the error bound , Making the confidence interval wider , and

Decreasing the confidence level decreases the error bound , Making the confidence interval narrower .

**Effect of following on width :**

# The width of the confidence interval decreases as the sample size increases .

# The width increases as the standard deviation increases .

# The Width increases as the Confidence level increases .

For each of the following situations, state what happens to the
width of the confidence interval. Justify your answers.
A) Population standard deviation increases
B) Sample size decreases (assuming CLT still holds)
C) Confidence level decreases
D) Sample mean increases

what happens to the width of a confidence interval as the
confidence
level increases? Provide some examples and explain your
answers.

How will the width of a confidence interval change (if at all)
in each of the following cases?
A) Sample standard deviation decreases:
a) increase
b) decrease c) stay
the same
B) Sample size decreases:
a) increase
b) decrease
c) stay the same
C) You change from a 95% CI to a 99% CI:
a) increase
b) decrease
c) stay the same

The width of a confidence interval
estimate for a population mean when the population standard
deviation is known will
(A) become narrower if the
size of the sample being used is increased and the confidence level
is unchanged.
(B) not change if
only the sample size is increased.
(C) become wider if
the sample size remains the same and the confidence level
decreases.
(D) become narrower if the
size of the sample is decreased and the confidence level is
unchanged....

where would you use a confidence interval in everyday
life? When n increases what happens to the width of a confidence
interval?

What happens to the
width of your confidence interval as you increase your confidence
level? Why does this happen? Provide a real life example that
explains this concept.

Which of the following is true if, all other things being equal,
if the USD rallies 1% versus the GBP (British pound)? Check all
that apply. (There are 2 correct answers)
a) The value of BP ADRs will decrease all other things being
equal. The value of BP ADRs will decrease all other things being
equal.
b) US companies that earn a large percentage of their profits in
the UK will exceed EPS expectations all other things being
equal.
c)...

Explain what happens to the 95 % confidence interval as the
sample size increases.
Explain what happens to the width of the confidence interval
for a 99% interval versus a 95%.

All other things held constant,
premiums on options will increase when
____
The volatility of the underlying asset falls
The term to maturity decreases
The strike price drops
None of the above

Discuss how each of the following will affect the width of a
confidence interval for estimating a population proportion (in each
case assume all other values remain constant):
a) An increase in sample size used to find pˆ
b) A higher confidence level

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