Question

The monthly closing stock prices (rounded to the nearest dollar) for Panera Bread Co. for the first six months of 2010 are reported in the following table. [You may find it useful to reference the t table.]
  

Months	Closing Stock Price
January	145
February	144
March	149
April	146
May	150
June	140

Source: http://finance.yahoo.com.
  

a. Calculate the sample mean and the sample standard deviation. (Round intermediate calculations to at least 4 decimal places and "Sample mean" and "Sample standard deviation" to 2 decimal places.)

b. Calculate the 90% confidence interval for the mean stock price of Panera Bread Co., assuming that the stock price is normally distributed. (Round "t" value to 3 decimal places and final answers to 2 decimal places.)   

c. What happens to the margin of error if a higher confidence level is used for the interval estimate?

• The margin of error decreases as the confidence level increases.

• The margin of error increases as the confidence level increases.

Answer 1

(c) Ans :

• The margin of error increases as the confidence level increases.