Question

R1.6: Twenty-one randomly selected managers in the healthcare industry were sampled with regard to their average bonus. A 95% confidence interval was calculated to be ($1,131,356, $4,824,124). Which of the following interpretations is correct?

A. 95% of the sampled bonus values fell between $1,131,356 and $4,824,123.

B. Within the population of managers in the healthcare industry, 95% of managers will have a bonus that fall in the interval $1,131,356 and $4,824,123.

C. If we calculate the confidence interval 100 times (one of them is $1,131,356 and $4,824,123), almost 95 of them contain the population average for managers’ bonuses.

D. There is a 95% confidence that the sample mean of managers’ bonuses falls in the interval $1,131,356 and $4,824,123.

Answer 1

Here, correct answer is “B. Within the population of managers in the healthcare industry, 95% of managers will have a bonus that fall in the interval $1,131,356 and $4,824,123.”

Explanation:

Here, we took sample of Twenty-one randomly selected managers in the healthcare industry. The concept of confidence interval applied to imply that 95% of total population of the managers in health care industry, will have a bonus that fall in the interval $1,131,356 and $4,824,123. Other options are not relevant; hence, other options are eliminated.