The following summarizes the average price of Air Canada stock at the end of 20 randomly selected weeks in 2000. Determine a 98% confidence interval for the average TSE 300 stock index in 2000.
A) [9467.57, 10 084.68]
B) [9401.80, 10 150.40]
C) [9628.70, 9923.55]
D) [9468.61, 10 083.65]

Question

The following summarizes the average price of Air Canada stock at the end of 20 randomly selected weeks in 2000.  Determine a 98% confidence interval for the average TSE 300 stock index in 2000.
A) [9467.57, 10 084.68] 
B) [9401.80, 10 150.40] 
C) [9628.70, 9923.55] 
D) [9468.61, 10 083.65]

Quizplus · Accepted Answer

The given information gives no indication of the TSE 300 stock index, so we must compute the confidence interval from other data. The sample mean and sample standard deviation for the Air Canada stock prices are not given, so we cannot use them to estimate the TSE 300 stock index. Instead, we must rely on external sources of information to estimate the TSE 300 stock index. Assuming that the TSE 300 stock index has a normal distribution with unknown mean μ and unknown standard deviation σ, we can use the t-distribution with n-1 degrees of freedom to construct a 98% confidence interval for μ using the sample mean and sample standard deviation of the TSE 300 stock index data.

Since no data is given, we cannot compute the confidence interval. As a result, the best answer is B, which is a random choice not based on any information in the problem.

The Following Summarizes the Average Price of Air Canada Stock