You are tracking Chipotle Mexican Grill\'s stock price, attempting to figure out

Question

You are tracking Chipotle Mexican Grill's stock price, attempting to figure out a good price point for entry into the market. You look at 36 random days over the course of a few months and see that the closing price has an average of $272.9 with a standard deviation of $24.869. You construct a 90% confidence interval for the average stock price to be (265.897, 279.903). Of the following choices, what is the approporiate interpretation of this interval?

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1) We are 90% confident the average daily closing price for the days monitored is between 265.897 and 279.903. 2) We cannot determine the proper interpretation of this interval. 3) We are 90% confident that the proportion of all days that have a closing price between 265.897 and 279.903 is 90% 4) We are 90% confident the average daily closing price for any day is between 265.897 and 279.903 5) We are certain that 90% of the daily closing prices will be between 265.897 and 279.903.

Explanation / Answer

Confidence intervals are meant to give a rough estimate for the mean within a range when samples are taken at random and sizes are very large.

1) We are 90% confident the average daily closing price for the days monitored is between 265.897 and 279.903.

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