A retired statistician was interested in determining the average cost of a $200,000.00 term life insurance policy for a 60-year-old male non-smoker. He randomly sampled 65 subjects (60-year-old male non-smokers) and constructed the following 95 percent confidence interval for the mean cost of the term life insurance: ($850.00, $1050.00). State the appropriate interpretation for this confidence interval. Note that all answers begin with "We are 95 percent confidence that…"
A) The average term life insurance cost for sampled 65 subjects falls between $850.00 and $1050.00
B) The term life insurance cost of the retired statistician's insurance policy falls between $850.00 and $1050.00
C) The term life insurance cost for all 60-year-old male non-smokers' insurance policies falls between $850.00 and $1050.00
D) The average term life insurance costs for all 60-year-old male non-smokers falls between $850.00 and $1050.00

Question

Quizplus · Accepted Answer

The confidence interval is an estimate of the range in which the true average cost for the entire population of 60-year-old male non-smokers is likely to fall.

A Retired Statistician Was Interested in Determining the Average Cost