University of Ferhat Abbas- Setif -1

Faculty of economics, Commerce and Management sciences

Exercise 01:
A simple random sample of 60 items resulted in a sample mean of 80. The population standard
deviation is 𝜎 = 15.
1- Compute the 95% confidence interval for the population mean 𝜇?
2- Compute the 90% confidence interval for the population mean?
3- Assume that the same sample mean was obtained from a sample of 120 items. Provide a
95% confidence interval for the population mean?
4- What is the effect of a larger sample size on the interval estimate?
Exercise 02:
The following sample data are from normal distribution: 10, 8,12, 15, 13, 11, 6, 5.
1- What is the point estimate of the population mean?
2- What is the point estimate of the population standard deviation?
3- With 95% confidence, what is the margin of error for the estimation of the population
mean?
4- What is the 95% confidence interval for the population mean?
5- What is the 99% confidence interval for the population mean?
6- What happens to the margin of error and the confidence interval as the confidence level is
increased?
Exercise 03:
Many medical professionals believe that eating too much red meat increases the risk of heart
disease and cancer. Suppose you would like to conduct a survey to determine the yearly
consumption of beef by a typical Algerian and want to use 3 kg as the desired margin of error for
a confidence interval estimate of the population mean amount of beef consumed annually. Use 25
kg as a planning value for the population standard deviation and recommend a sample size for each
of the following situations:
1- A 90% confidence interval is desired for the mean amount of beef consumed?
2- A 95% confidence interval is desired for the mean amount of beef consumed?
3- A 99% confidence interval is desired for the mean amount of beef consumed?
4- When the desired margin of error is set, what happens to the sample size as the confidence
level is increased? Would you recommend using a 99% confidence interval in this case?
Discuss.
Exercise 04:
According to Franchise Business Review, over 50% of all food franchises earn a profit of less
than $50,000 a year. In a sample of 142 casual dining restaurants, 81 earned profit less than
50,000 last year.
University of Ferhat Abbas- Setif -1
Faculty of economics, Commerce and Management sciences
Department of Accounting & Finance
Second - year Accounting Practice Problems- Series 03- Statistics 04

1- What is the point estimate of the proportion of casual dining restaurants that earned a
profit of less than $50,000 last year?
2- Determine the margin of error and provide a 95% confidence interval for the proportion
of casual dining restaurants that earned a profit of less than $50,000 last year?
3- How large a sample is needed if the desired margin of error is 0.03?
Exercise 05:
The following results come from two independent random samples taken of two populations.

Sample 1 Sample 2
𝑛1 = 50 𝑛2 = 35
𝑥̅1 = 13.6 𝑥̅2 = 11.6
𝜎1 = 2.2 𝜎2 = 3

1- What is the point estimate of the difference between the two population means?
2- Provide a 90% confidence interval of the difference between the two population means?
3- Provide 95% confidence interval for the difference between the two population means?

Exercise 06:
Consider the following data for two independent random samples taken from two normal
populations.

Sample 01 10 7 13 7 9 8
Sample 02 8 7 8 4 6 9
1- Compute the two sample means?
2- Compute the two sample standard deviations?
3- What is the point estimate of the difference between the two population means?
4- What is the 90% confidence interval estimate of the difference between the two
population means?
Exercise 07:
Forbes reports that women trust recommendations from Pinterest more than recommendations
from any other social network. But does trust in Pinterest differ by gender? The following
sample data show the number of women and men who stated in a recent sample that they trust
recommendations made on Pinterest:

Women Men
Sample 150 170
Trust recommendations Made om Pinterest 117 102
University of Ferhat Abbas- Setif -1
Faculty of economics, Commerce and Management sciences
Department of Accounting & Finance
Second - year Accounting Practice Problems- Series 03- Statistics 04

Exercise 08:
Amazon.com is testing the use of drones to deliver packages for same-day delivery. In order to
quote narrow time windows, the variability in delivery times must be sufficiently small. Consider
a sample of 24 drone deliveries with a sample variance of s2 =0.81
1- Construct a 90% confidence interval estimate of the population variance for the drone
delivery time?
2- Construct a 90% confidence interval estimate of the population standard deviation?
Exercise 09 Optional:
Consider the following data for two independent random samples taken from two normal
populations.

Sample 01 Sample 2
n1 =16 n2 =21
s12 =20 s22 =15

Required: construct a 90% confidence interval for the ratio of the two population variances?