Brayden is going to invest in an account paying an interest rate of 4.3% compounded
2 answers:
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Answer:
A. The larger the sample size the better.
Step-by-step explanation:
Central Limit Theorem
The Central Limit Theorem establishes that, for a normally distributed random variable X, with mean and standard deviation
, the sampling distribution of the sample means with size n can be approximated to a normal distribution with mean
and standard deviation
.
For a skewed variable, the Central Limit Theorem can also be applied, as long as n is at least 30.
For a proportion p in a sample of size n, the sampling distribution of the sample proportion will be approximately normal with mean and standard deviation
In this question:
We have to look at the standard error, which is:
This means that an increase in the sample size reduces the standard error, and thus, the larger the sample size the better, and the correct answer is given by option a.