Chapter 8: Problem 2
For a normal population with known variance \(\sigma^{2}\) : (a) What value of \(z_{\alpha / 2}\) in Equation \(8-5\) gives \(98 \%\) confidence? (b) What value of \(z_{\alpha / 2}\) in Equation \(8-5\) gives \(80 \%\) confidence? (c) What value of \(z_{\alpha / 2}\) in Equation \(8-5\) gives \(75 \%\) confidence?
Short Answer
Step by step solution
Understand the Confidence Level
Calculate Alpha (\(\alpha\))
Step 3a: Determine \(z_{\alpha/2}\) for 98% confidence
Step 3b: Determine \(z_{\alpha/2}\) for 80% confidence
Step 3c: Determine \(z_{\alpha/2}\) for 75% confidence
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Key Concepts
These are the key concepts you need to understand to accurately answer the question.
Normal Distribution
- Symmetry: The curve is perfectly symmetrical around the mean.
- Peakedness: The highest point on the curve corresponds to the mean.
- Area Under the Curve (AUC): The total area under the curve represents probability and it equals 1.
Standard Normal Distribution
- This transformation is useful as it allows for the comparison of scores or data points across different datasets or distributions.
- Each point in the standard normal distribution is represented by a z-value, which indicates how many standard deviations away a given value is from the mean.
z-value
- Significance: A z-value of 0 indicates the data point is exactly at the mean, while positive and negative z-values indicate positions above or below the mean respectively.
- Use in Confidence Intervals: In constructing confidence intervals, z-values determine the margin of error by providing the appropriate critical values from the standard normal distribution.
- The wider the confidence interval, the larger the corresponding z-value would be for heightened accuracy.
Statistical Confidence Levels
- Determining Confidence Intervals: Confidence intervals give a range of values within which a parameter is expected to lie. Higher confidence levels indicate a wider interval to account for greater uncertainty.
- Alpha (\(\alpha\)) and Tails: The alpha represents the total probability of an error occurring outside the confidence interval. For a given confidence level, alpha is split equally between both tails of the distribution.
- Critical z-values: For given confidence levels, the z-values that correspond to the cutoff points (tails) can be obtained from standard normal distribution tables.