Instruction 8-12
A wealthy real estate investor wants to decide whether it is a good investment to build a high-end shopping complex in a suburb of Sydney. His main concern is the total market value of the 3,605 houses in the suburb. From past experience, the standard deviation of market housing prices is estimated to be $81,000. He commissioned a statistical consulting group to take a sample of 200 houses and obtained a sample average market price of $450,000 and a sample standard deviation of $77,400. The consulting group also found out that the average differences between market prices and appraised prices was $250,000 with a standard deviation of $6,800. Also the proportion of houses in the sample that are appraised for higher than the market prices is 0.24.
-Referring to Instruction 8-12,what will be the 90% confidence interval for the average market price of the houses in the suburb constructed by the consulting group?

Question

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The Answer of Instruction 8-12
A wealthy real estate investor wants to decide whether it is a good investment to build a high-end shopping complex in a suburb of Sydney. His main concern is the total market value of the 3,605 houses in the suburb. From past experience, the standard deviation of market housing prices is estimated to be $81,000. He commissioned a statistical consulting group to take a sample of 200 houses and obtained a sample average market price of $450,000 and a sample standard deviation of $77,400. The consulting group also found out that the average differences between market prices and appraised prices was $250,000 with a standard deviation of $6,800. Also the proportion of houses in the sample that are appraised for higher than the market prices is 0.24.
-Referring to Instruction 8-12,what will be the 90% confidence interval for the average market price of the houses in the suburb constructed by the consulting group?

Instruction 8-12 A Wealthy Real Estate Investor Wants to Decide Whether It