Question

16. A large-sample 95 percent confidence interval for the proportion of credit

card customers that have reported fraudulent charges on their account is
(0.028, 0.086). What is the point estimate for the proportion of all credit card
customers that have reported fraudulent charges on their account?
(A) 0.029
(B) 0.057
(C) 0.058
(D) 0.114
(E) 0.196​

Answer 1

(B) 0.057

Explanation:

The 95% confidence interval is (0.028, 0.086). The formula for the confidence interval is μ ± e where μ is the mean and e is the margin of error.

Therefore the confidence interval is (μ - e , μ + e).

That is μ - e = 0.028 and μ + e = 0.086

To get the point estimate which is the mean, we sum the two proportions and divide it by two.

Therefore point estimate (μ) = (0.028 + 0.086) / 2 = 0.057