Private colleges and universities rely on money contributed by individuals and corporations for their operating expenses. Much of this money is put into a fund called an endowment, and the college spends only the interest earned by the fund. A recent survey of 8 private colleges in the United States collected information on the endowment amount. Based on this information, which of the following will you construct to learn about the mean endowment of all private colleges in the United States?
A) confidence interval estimate for the total using the Student's t distribution
B) confidence interval estimate for the difference using the standard normal distribution
C) confidence interval estimate for the proportion using the standard normal distribution
D) confidence interval estimate for the mean using the Student's t distribution

Question

Quizplus · Accepted Answer

We are interested in learning about the mean endowment of all private colleges in the United States, which is a population parameter. Since we have information from a sample of private colleges, we can use a confidence interval estimate for the population mean using the Student's t distribution. Therefore, choice D is the best option.

Private Colleges and Universities Rely on Money Contributed by Individuals