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). State the appropriate interpretation for
This confidence interval. Note that all answers begin with ʺWe are 95 percent confidence that…ʺ
A)The term life insurance cost for all 60-year-old male non-smokersʹ insurance policies falls between $850.00 and $1050.00
B)The term life insurance cost of the retired statisticianʹs insurance policy falls between $850.00 and $1050.00
C)The average term life insurance costs for all 60-year-old male non-smokers falls between $850.00 and $1050.00
D)The average term life insurance cost for sampled 65 subjects falls between $850.00 and $1050.00

Question

Quizplus · Accepted Answer

The correct interpretation of a confidence interval is about the population mean, not individual observations or the sample mean. Thus, it suggests that we are 95% confident that the average cost of the term life insurance for all 60-year-old male non-smokers falls within the interval ($850.00, $1050.00).

A Retired Statistician Was Interested in Determining the Average Cost