Question

Clare analyzes oil prices in her economics class. She finds that the mean oil price between 1988 and 2002 is $27 per barrel with a standard deviation of $5.50 per barrel. Select the z-score for a price of $35.25 per barrel. (Select one answer)

0.67

1.5

8.25

-8.25

Answer 1

Option 2: 1.5 is the correct answer.

Explanation:

Given information is:

Mean = μ = $27

SD = σ = $5.50

A z-score simply tells us how far a selected data value from the mean is.

Z-score is denoted by z and is given by the formula:

`z = (x-mean)/(SD)`

Let x = $35.25

Putting the values of mean and SD we get,

`z = (35.25-27)/(5.50)\\z = (8.25)/(5.50)\\z =1.5`

The value of z-score for a price of $35.25 per barrel is 1.5

Hence,

Option 2: 1.5 is the correct answer.