Question

If a confidence interval is constructed at a confidence level of 99% instead of 95%:

a)Estimation precision decreases
b)The precision of the estimate is not altered
c)We can accurately calculate the value of the parameter of interest
d)Estimation accuracy improves significantly

Answer 1

Confidence level /coefficient of a confidence interval tells us the amount of confidence we can have on that interval in estimating a population parameter.

For example a 95% confidence interval tells us that on an average almost 95% of the time, the confidence interval will contain the true value of the population parameter.

Similarly, a 99% confidence interval tells us that on an average almost 99% of the time, the confidence interval will contain the true value of the population parameter.

So clearly more confidence coefficient means better accuracy of estimation.

Hence if a confidence interval is constructed at a level of 99% instead of 95% , then the estimation accuracy increases significantly.

Hope the solution helps. Thank you.

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