Question

A young investor in the stock market is concerned that investing in the stock market is...

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.

Homework Answers

Answer #1

(a) Which of the following conditions have been satisfied in this​situation?

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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