Question

Online customer service is a key element of online retailing. According to the WSJ Market Data Group, 37.5% www.priceline.com customers take advantage of this service. If random samples of 200 www.priceline.com customers are selected:

Within what symmetrical limits of the population percentage will 95% of the sample percentages fall?

Answer 1

7.5% www.priceline.com customers take advantage of the service, i.e. = 0.075

For larger sample size n = 200, it will approximately be normal with mean p = 0.075 and standard deviation = 0.0186

Recall the empirical rule (68-95-99 7 Rule or the Three Sigma Rule), it states that for a normal distribution, nearly all of the

data will fall within three standard deviations of the mean. The empirical rule can be broken down into three parts:

68% of data falls within the first standard deviation from the mean.

95% fall within two standard deviations.

99.7% fall within three standard deviations.

Two standard deviations from the mean is mean — 2*sd and mean + 2*sd

Hence, symmetrical limits of the population percentage will in which 95% of the sample percentages fall are 3.78% and

11.22%