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). Explain what the phrase ʺ95 percent
Confidentʺ means in this situation.
A)95 percent of all retired statisticians are underinsured.
B)95 percent of all the life insurance costs will fall within the specified interval.
C)In repeated sampling, the mean of the population will fall within the specified intervals 95 percent of the time.
D)In repeated sampling, 95 percent of the intervals constructed would contain the value of the true population mean.

Question

Quizplus · Accepted Answer

The phrase "95 percent confident" in the context of a confidence interval means that if we were to take many samples and construct a confidence interval from each sample in the same way, 95 percent of those intervals would contain the true population mean. This does not guarantee that the true mean falls within any single specific interval but rather describes the long-term behavior of confidence intervals constructed from repeated sampling.

A Retired Statistician Was Interested in Determining the Average Cost