A human resources manager wishes to estimate the proportion of employees in her large company who have supplemental health insurance. What is the sample size she should select if she wants 95 percent confidence and a margin of error of ± 0.01?
A) 9,604
B) 3,458
C) 6,765
D) 381
E) 4,096

Question

Quizplus · Accepted Answer

The formula for sample size to estimate a proportion is n = (Z^2 * p * q) / E^2, where Z is the z-score for the desired level of confidence, p is the estimated proportion, q = 1-p, and E is the maximum allowable margin of error. For a 95% confidence level, Z = 1.96. We do not have an estimated proportion, so we will use the most conservative value of p = 0.5. Plugging in the numbers, we get n = (1.96^2 * 0.5 * 0.5) / 0.01^2 = 9,604. Therefore, the HR manager should select a sample size of 9,604.

A Human Resources Manager Wishes to Estimate the Proportion of Employees