B. Construct a 90% confidence interval for the mean yield of five year CDs. C. C

Question

B. Construct a 90% confidence interval for the mean yield of five year CDs.
C. Compare results A. and B.

STAT 206 Spring 2018 926/7408questionld-14&flushed-true;&icld; Homework: Homework8 Sections 8.1-8.3 Ashwin Luther 3/18/18 8:41 PM ab Stati CoursesScore: 0 of 3 pts urse Home 8.2.21-T Seve HW Score: 43.89%, 15.8 of 36 pts 13 of 17 (12 complete) Is there a difference in the yields of different types of investments? The accompanying data provide yields for a one-year cert for 25 banks. Complete parts a through c below. Question Help izzes & Tests certificate of deposit (CD) and a five-year CD EEB Click the icon to view the yields for one-year CDs and five-year CDs dy Plan a 90% confidence interval estimate for the mean yield of one-year CDs. Type integers or decimals rounded to two decimal places as needed.) atCrunch ols for ltimedia Libr Enter your answer in the edit fields and then click Check Answer. urse Tools emaining Clear All 841 PM Type here to search

Explanation / Answer

Solution:-

Given that One year CD : mean = 0.87 , = 0.6045

Five year CD : mean = 4.302 , =  0.4942

df = n-1 = 25 -1 = 24

t = 1.711

a) 90% confidence interval estimate for the mean yield of one-year CDs : X +/- t*s/sqrt(n)

: 0.87 +/- 1.711*0.6045/sqrt(25)

: (0.66 ,  1.08)

b) 90% confidence interval estimate for the mean yield of five-year CDs : 4.302 +/- 1.711*0.4942/sqrt(25)

: (4.13 , 4.47)

c. The mean yield of five year CD is greater than the mean yield of one year CD

  

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