Question

What is the sample mean yield on corporate bonds and what is the sample standard deviation? Develop a 95% confidence interval for the population mean yield on corporate bonds. You may need to use the appropriate appendix table or technology to answer this question. A sample containing the maturity and yield is in the file CorporateBonds. (Round your answers to four decimal places.)

Answer 1

The sample mean yield on corporate bonds is the average yield of a random sample. The sample standard deviation measures the variability of the yield. To develop a 95% confidence interval, calculate the sample mean and standard deviation, and use the formula CI = sample mean ± (z-value) * (sample standard deviation / √n).

Step-by-step explanation:

The sample mean yield on corporate bonds refers to the average yield of a random sample of corporate bonds. The sample standard deviation measures the variability of the yield in the sample.

To develop a 95% confidence interval for the population mean yield on corporate bonds, you need to use the appropriate formula. In this case, since the sample size is large (assumed to be over 30), you can use the z-distribution instead of the t-distribution.

First, calculate the sample mean yield and the sample standard deviation. Then, use the formula:

CI = sample mean ± (z-value) * (sample standard deviation / √n)

where CI represents the confidence interval, the z-value corresponds to the desired confidence level (for 95% confidence, the z-value is approximately 1.96), n is the sample size, and √n denotes the square root of n.

Plug in the values into the formula to calculate the confidence interval for the population mean yield on corporate bonds.