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According to a 2017 Pew Research report, \(40 \%\) of millennials have a BA degree. Suppose we take a random sample of 500 millennials and find the proportion who have a driver's license. Find the probability that at most \(35 \%\) of the sample has a BA degree. Begin by verifying that the conditions for the Central Limit Theorem for Sample Proportions have been met.

Short Answer

Expert verified
The probability that at most 35% of the sample has a BA degree is 1.19%.

Step by step solution

01

Verification of the Central Limit Theorem for Sample Proportions Conditions

For the Central Limit Theorem for Sample Proportions to apply, 2 conditions must be satisfied: \(n*p* ≥ 10\) and \(n*(1-p*) ≥ 10\), where \(n\) is the sample size and \(p*\) is the population proportion. Using the provided numbers where \(n = 500\) and \(p* = 0.40\), checking these conditions gives \(500*0.40 = 200\) and \(500*(1-0.40) = 300\). Both these values are greater than 10, so the conditions for the theorem are met.
02

Calculating the Standard Error

After confirming both conditions are met, next calculate the standard error using the formula: \(SE = √((p*(1-p*))/n)\), where \(p* = 0.40\), and \(n = 500\). Substituting these values, the standard error works out to \(0.022\)
03

Applying Normal Distribution to Calculate the Probability

Using the standard normal distribution, the Z-score must be calculated first with the following formula: \(Z = (p - p*)/SE\), where \(p = 0.35\), \(p* = 0.40\), and \(SE = 0.022\). Substituting these values, the Z-score is \(-2.27\). Then look up this Z-score in a Z-table (or use statistical software) to find the probability, which is \(0.0119\) or 1.19%.

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