Stock Market and confidence intervals

Solution Summary

Currently the stock market is declining. A stock broker wishes to determine his portfolio. She randomly choose 64 daily stock prices for stock A from the past year data, and obtain the 95.44% confidence interval for the average price to be [ $30.0 , $40.0] A. What is the confidence coefficient? aa) 50% bb) .9544 cc) 40.00 dd) $35.00 I believe it is bb, but correct me if I am wrong B. What is the average stock price of these 64 daily prices? aa) $35.00 bb) $30.00 cc) $40.00 dd) 95.44% I believe it is $35.00, because 30+40=70/2=35, correct me if I am wrong. C. Which test statistic is appied for this situation? aa) Z bb) t cc) None of the above. Not quite sure , but I think it is aa) Z, correct me if I am wrong. D. Which statemnt is correct: aa) This is a small sample bb) This is a large sample. cc) We should not invest in the stock market. dd) The current stock market for stock A is very good. I believe it is bb) large sample, because of the 64 stock prices, but correct me if i am wrong. E. What is an appropriate interpretation of the interval [430.0 , $40.0]? aa) 95.44% sure each daily price is between $30 and $40. bb) 95.44% of daily stock prices fall into $30 and $40. cc) 95.44% sure the true average price of stock A in between $30 and $40. dd) 95.44% sure the sample average price of these 64 daily prices is between $30 and $40. Not sure, but if I had to guess, bb. F. If we decide to compute an 80% confidence interval for the average price of stock A using the same data, then, 80% confidence interval would be____ the 95.44% confidence interval: aa) narrower than. bb) wider than. cc) the same as.

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