CHAPTER 1: ANSWER KEY

Case Exercises
1. Return to me
. tabstat Return, statistics(mean)
variable |
mean
-------------+---------Return |
.16
-----------------------. display .16*(1-.16)
0.1344
. display (.16*(1-.16))^.5
0.36660606

2. EE TV Sales
part one
Store A

Store B

0.066807

0.04779

prob of stock
out

Store A has a higher chance of running out of stock.

part two
Store A
20.21499
21

Store B
15.16124
16

min stock needed

integer value

Store A needs 21 TV's in stock while Store B needs

16.

3. EE Job Applications
part a.
. tabstat Acceptance_Rate, s(mean sd semean)
variable |

mean

sd

se(mean)

-------------+--------------------------------Acceptance_Rate |

.4306018

.1396651

.0188324

-----------------------------------------------

part b.

. ci Acceptance_Rate
Variable |

Obs

Mean

Std. Err.

[95% Conf. Interval]

-------------+--------------------------------------------------------------Acceptance_Rate |

55

.4306018

.0188324

.392845

.4683586

*Manual calculation:
t-statistic for computing 95%-confidence intervals:

2.0049

95% confidence interval: 0.4306 +/- 2.0049*0.01883 = [0.39285, 0.46835]

part c.
. ci Acceptance_Rate, level(90)
Variable |

Obs

Mean

Std. Err.

[90% Conf. Interval]

-------------+--------------------------------------------------------------Acceptance~e |

55

.4306018

.0188324

.3990845

.4621191

*Manual calculation:
t-statistic for computing 90%-confidence intervals:

1.6736

90% confidence interval: 0.4306 +/- 1.6736*0.01883 = [0.39909, 0.46211]

part d.
prob of sample mean <= 0.4306 if true mean = 0.50: 0.00026499
(Stata command: display 1-ttail(54, (.4306-.5)/.01883))
part e.
Given the low probability that a number as low as our sample mean would have occurred if the
true mean acceptance rate was fifty percent, this assumption seems unreasonable.

4. EE Stores
part a.
. tabstat half_plus, s(mean sd semean)
variable |

mean

sd

se(mean)

-------------+-----------------------------half_plus |

.3636364

.4854794

.065462

--------------------------------------------

part b.
. ci half_plus
Variable |

Obs

Mean

Std. Err.

[95% Conf. Interval]

-------------+--------------------------------------------------------------half_plus |

55

.3636364

.065462

.2323929

.4948798

*Manual calculation:
t-statistic for computing 95%-confidence intervals:

2.0049

95% confidence interval: 0.3636 +/- 2.0049*0.06546 = [0.23236, 0.49484]

part c.
. ci half_plus, level(70)
Variable |

Obs

Mean

Std. Err.

[70% Conf. Interval]

-------------+--------------------------------------------------------------half_plus |

55

.3636364

.065462

.2951315

.4321412

*Manual calculation:
t-statistic for computing 70%-confidence intervals:

1.0465

70% confidence interval: 0.3636 +/- 1.0465*0.06546 = [0.29510, 0.43210]

part d.
prob of sample mean <= 0.3636 if true mean = 0.50: 0.0209665
(Stata command: display 1-ttail(54, (.3636-.5)/.06546))
part e.
Given the low probability that a number as low as our sample proportion would have occurred if
the true proportion was fifty percent, it seems unreasonable to conclude that the true proportion
was indeed fifty percent.

Problems
problem 1

Prob
0.99744
0.96407
0.78814
0.42074
0.11507

a
b
c
d
e
problem 2

Prob
0.01072
0.09680
0.38209
0.75804
0.95543

problem 6

a
b
c
d
e

Prob
0.01600
0.10695
0.27611
0.24642
0.07894

problem 7

a
b
c
d
e

a
b
c
d
e

Prob
0.99823
0.90879
0.56618
0.13933
0.00621

a
b
c
d
e

Prob
0.12507
0.46017
0.59871
0.82894
0.96407

problem 3

problem 4

problem 5

problem 10

95% confidence interval

a
b
c
d
e

Prob
0.15731
0.21615
0.21615
0.15731
0.08331

a
b
c
d
e
f

z
0.00000
-0.91537
-1.95996
0.55338
1.28155
1.64485

a
b
c
d
e
f

Prob
0.11168
0.18336
0.28366
0.41772
0.59764
0.97428

a
b
c
d
e
f

Prob
0.93696
0.76293
0.57114
0.51589
0.22800
0.02543

problem 8

problem 9

sample proportion = 0.57

sample size = 802
standard error of proportion =
0.57 +/- 1.96 * 0.01748

0.01748173

[ 0.5357, 0.6043 ]

problem 11

sample mean = 6.5 minutes

sample size = 117
sample standard dev = 14
standard error of the mean =
t statistic for 90% CI =

90% confidence interval

problem 12

6.5 +/- 1.658 * 1.2943

[ 4.3541, 8.6459 ]

sample mean = 37
sample size = 83
sample standard dev = 21
standard error of the mean =

a
b
c

90% CI
95% CI
99% CI

problem 13

t statistic
1.6636
1.9893
2.6371

90% CI
95% CI
99% CI

t statistic
1.6820
2.0181
2.6981

2.30504946

interval
33.16521
40.83479
32.41452
41.58548
30.9213
43.0787

sample mean = 1.15

sample size = 43
sample standard dev = 0.482
standard error of the mean =

a
b
c

1.29430046
1.65809524

0.07350431

interval
1.0263693
1.2736307
1.0016623
1.2983377
0.9516805
1.3483195