A financial analyst is interested in estimating the proportion of publicly traded companies on the Toronto Stock Exchange that have cash balances of more than 10 percent of the total assets of the company. A random sample of 100 companies shows that 13 had cash balances of more than 10 percent of assets. The 90 percent confidence interval estimate is
A) 0.0747 to 0.1853
B) 0.0641 to 0.1959
C) -0.0870 to 0.1730
D) -0.0507 to 0.1494
E) -0.0412 to 0.1588

Question

Quizplus · Accepted Answer

The sample proportion is 0.13. Using the formula for a confidence interval for a proportion, the 90% confidence interval is calculated as 0.13 ± 1.645 * sqrt((0.13*(1-0.13))/100), which results in the interval 0.0747 to 0.1853.

A Financial Analyst Is Interested in Estimating the Proportion of Publicly