An analyst for a financial investment firm recently went through the effort to determine the required sample size for estimating the mean number of transactions per year for the clients of his firm. The calculations, which were based on a 95 percent confidence level and a margin of error of ±3, gave a required sample size of 300. Given this information, the value used for the population standard deviation must have been about 26.5 transactions.

Question

Quizplus · Accepted Answer

The sample size formula for estimating a mean with a given confidence level and margin of error is n = (Z*σ/E)^2. For a 95% confidence level, Z is approximately 1.96. Plugging in the values: 300 = (1.96*σ/3)^2, solving for σ gives approximately 26.5.

An Analyst for a Financial Investment Firm Recently Went Through