A young investor in the stock market is concerned that investing in the stock market is actually gambling, since the chance of the stock market going up on any given day is 50 %. She decides to track her favorite industrial company stock for 257 consecutive days and finds that on 138 days the stock was "up." Complete parts a through c. a) Find a 95 % confidence interval for the proportion of days the stock is "up." Check the conditions first. Which of the following conditions have been satisfied in this situation? Select all that apply. A. Randomization Condition B. 10% Condition C. Success/Failure Condition Find the 95 % confidence interval. left parenthesis nothing comma nothing right parenthesis (Round to three decimal places as needed.) b) Does your confidence interval provide any evidence that the market is not random? Explain. Select the correct choice below and fill in the answer box to complete your choice. (Type an integer or a decimal. Do not round.) A. Yes because nothing is within the interval, so it's not a plausible value for the true proportion of "up" days. B. No because nothing is within the interval, so it's a plausible value for the true proportion of "up" days. C. No because nothing is not within the interval, so it's a plausible value for the true proportion of "up" days. D. Yes because nothing is not within the interval, so it's not a plausible value for the true proportion of "up" days. c) What is the significance level of this test? Explain. Select the correct choice below and fill in the answer boxes to complete your choice. (Type integers or decimals. Do not round.) A. The significance level is alpha equalsnothing. It's a right-tail test based on a nothing % confidence level. B. The significance level is beta equalsnothing. It's a two-tail test based on a nothing % confidence level. C. The significance level is beta equalsnothing. It's a left-tail test based on a nothing % confidence level. D. The significance level is alpha equalsnothing. It's a two-tail test based on a nothing % confidence level.
(a) Which of the following conditions have been satisfied in thissituation?
B.10% Condition
C. Success/Failure Condition
Find the 95 % confidence interval.
(0.476, 0.598)
(b) Does your confidence interval provide any evidence that the market is not random? Explain.
B. No because 0.5 is within the interval, so it's a plausible value for the true proportion of "up" days.
(c) What is the significance level of this test? Explain.
D. The significance level is 0.05. It's a two-tail test based on a 95 % confidence level.
Observed | Hypothesized | |
0.537 | 0.5 | p (as decimal) |
138/257 | 129/257 | p (as fraction) |
138. | 128.5 | X |
257 | 257 | n |
0.0312 | std. error | |
0.476 | confidence interval 95.% lower | |
0.598 | confidence interval 95.% upper | |
0.061 | margin of error |
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