Question

Is there a difference in the yields of different types of​ investments? The accompanying data provide yields for a​ one-year certificate of deposit​ (CD) and a​ five-year CD for 25 banks. Complete parts a through c below.

Bank   One-Year CD   Five-Year CD
1   0.45   4.90
2   0.75   4.95
3   0.85   4.90
4   0.25   3.25
5   0.35   4.05
6   0.20   4.00
7   0.50   3.80
8   2.05   4.40
9   0.65   4.70
10   0.75   4.00
11   0.40   4.50
12   0.55   3.50
13   0.25   4.20
14   0.60   5.00
15   1.70   4.10
16   1.00   4.30
17   1.40   4.95
18   2.20   4.70
19   1.05   4.95
20   0.90   4.40
21   0.60   4.40
22   0.50   4.10
23   0.35   3.50
24   1.10   4.35
25   1.90   4.05

a. Construct a 95​% confidence interval estimate for the mean yield of​ one-year CDs.

b. Construct a 95​% confidence interval estimate for the mean yield of​ five-years CDs.

Answer 1

a)

sample mean 'x̄=	0.85
sample size   n=	25.00
sample std deviation s=	0.58
std error 'sx=s/√n=	0.1158

for 95% CI; and 24 df, value of t=		2.064
margin of error E=t*std error    =		0.239
lower bound=sample mean-E =		0.613
Upper bound=sample mean+E =		1.091
from above 95% confidence interval for population mean =(0.613 , 1.091)

b)

sample mean 'x̄=	4.32
sample size   n=	25.00
sample std deviation s=	0.50
std error 'sx=s/√n=	0.0991

for 95% CI; and 24 df, value of t=		2.064
margin of error E=t*std error    =		0.204
lower bound=sample mean-E =		4.114
Upper bound=sample mean+E =		4.522
from above 95% confidence interval for population mean =(4.114 , 4.522)