Question

Q 3.28: To create a confidence interval from a bootstrap distribution using percentiles, we keep the middle values and chop off a certain percent from each tail. Indicate what percent of values must be chopped off from each tail for a 97% confidence level. A : We keep the middle 97% of values by chopping off 1.5% from each tail. B : We keep the middle 1.5% of values by chopping off 97% from each tail. C : We keep the middle 3% of values by chopping off 97% from each tail. D : We keep the middle 3% of values by chopping off 1.5% from each tail. E : We keep the middle 97% of values by chopping off 3% from each tail.

Answer 1

A : We keep the middle 97% of values by chopping off 1.5% from each tail.

Explanation:

We have that to find our
`\alpha` level, that is the subtraction of 1 by the confidence interval divided by 2. So:

`\alpha = (1-0.97)/(2) = 0.015`

This means that for a 97% confidence interval, 1.5% of each tail is removed, while the middle 97% of values are kept.

So the corect answer is:

A : We keep the middle 97% of values by chopping off 1.5% from each tail.