The vice president (VP) of marketing for a bank has asked an analyst to estimate
ID: 3127376 • Letter: T
Question
The vice president (VP) of marketing for a bank has asked an analyst to estimate the true mean student loan debt of customers in various states in the U. S., with the idea that the bank might try to begin offering refinancing options to customers who meet certain criteria. The analyst examines student loan balance data from various sources and calculates a 95% confidence interval for the mean debt amount in Texas to be $24,550 to $27,980. He presents this interval to the VP. How should the VP interpret this interval? Read carefully!
The VP can be 95% confident, based on the method the analyst used to calculate the interval, that the true mean amount of student loan debt in Texas is between $24,550 and $27,980.
The VP can be 95% confident, based on the method the analyst used to calculate the interval, the true actual amount of student loan debt in Texas is between $24,550 and $27,980.
The VP can be 95% confident, based on the method the analyst used to calculate the interval, that 95% of the true mean amount of student loan debt in Texas is between $24,550 and $27,980.
Based on the method the analyst used to calculate the interval, the VP can be confident that there is a 95% chance that the true mean amount of student loan debt in Texas is between $24,550 and $27,980.
The VP can be 95% confident, based on the method the analyst used to calculate the interval, that every Texan has a student loan debt between $24,550 and $27,980.
The VP can be 95% confident, based on the method the analyst used to calculate the interval, that the true mean amount of student loan debt in Texas is between $24,550 and $27,980.
The VP can be 95% confident, based on the method the analyst used to calculate the interval, the true actual amount of student loan debt in Texas is between $24,550 and $27,980.
The VP can be 95% confident, based on the method the analyst used to calculate the interval, that 95% of the true mean amount of student loan debt in Texas is between $24,550 and $27,980.
Based on the method the analyst used to calculate the interval, the VP can be confident that there is a 95% chance that the true mean amount of student loan debt in Texas is between $24,550 and $27,980.
The VP can be 95% confident, based on the method the analyst used to calculate the interval, that every Texan has a student loan debt between $24,550 and $27,980.
Explanation / Answer
The only correct way to interpret a confidence interval, is as done in
OPTION A: The VP can be 95% confident, based on the method the analyst used to calculate the interval, that the true mean amount of student loan debt in Texas is between $24,550 and $27,980.
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