Question

You are interested in getting an investment portfolio started with any extra money you make from your part time job while also going to school. While flipping through the latest edition of Money magazine, you read an article that of a survey of magazine subscribers, 164 were randomly selected and analyzed. A 95% confidence interval was constructed for the proportion of all subscribers who made money in the previous year in their investments, which was ( 0.6904 , 0.8218 ). What is the correct interpretation of this confidence interval

Answer 1

We are 95% confident that the proportion of all Money magazine subscribers that made money in the previous year from their investments is between 0.6904 and 0.8218

Explanation:

The confidence interval gives a range of values for which a population proportion will fall based on a given level of confidence, in this case it is 95%. This interval is calculated using the sample proportion. The sample proportion in this case is based on a number of samples examined. The interval we obtain in this case (0.6904; 0.8218) is the estimated range which we expect the population proportion to fall ; with a 95% confidence.