Question

In 2011, when the Gallup organization polled investors, 32% rated gold the best long-term investment.  But in April of 2013 Gallup surveyed a random sample of U.S. adults.  Respondents were asked to select the best long-term investment from a list of possibilities.  Only 168 of the 650 respondents chose gold as the best long-term investment.  By contrast, only 83 chose bonds.

Using excel determine answers on below questions:

a.       Compute the standard error for each sample proportion.  Compute and describe a 99% confidence interval in the context of the question.

b.      Do you think opinions about the value of gold as a long-term investment have really changed from the old 32% favorability rate, or do you think this is just sample variability?  Explain.

c.       Suppose we want to keep the margin of error at 4%, and we still want to construct a 99% confidence interval.  What is the necessary sample size?

d.      Based on the sample size obtained in part c, suppose 306 respondents chose gold as the best long-term investment.  Compute the standard error for choosing gold as the best long-term investment.  Compute and describe a 99% confidence interval in the context of the question.

e.       Based on the results of part d, do you think opinions about the value of gold as a long-term investment have really changed from the old 32% favorability rate, or do you think this is just sample variability?  Explain.