Answer:
a) The 90% confidence interval to estimate the proportion of family-owned businesses without strategic business plans is (0.4768, 0.5032). This means that we are 90% sure that the true proportion of all family-owned businesses without strategic business plans is between these two values.
b) Wider
Step-by-step explanation:
Question a:
In a sample with a number n of people surveyed with a probability of a success of , and a confidence level of
, we have the following confidence interval of proportions.
In which
z is the z-score that has a p-value of .
In a survey of randomly selected 3,900 family-owned businesses with revenues exceeding $1 million a year, it was found that 1,911 of them had no strategic business plan.
This means that
90% confidence level
So , z is the value of Z that has a p-value of
, so
.
The lower limit of this interval is:
The upper limit of this interval is:
The 90% confidence interval to estimate the proportion of family-owned businesses without strategic business plans is (0.4768, 0.5032). This means that we are 90% sure that the true proportion of all family-owned businesses without strategic business plans is between these two values.
Question b:
The margin of error is:
The higher the confidence level, the higher the value of z, thus the higher the margin of error and the interval is wider. Thus, a 99% confidence interval is wider than a 90% confidence interval.
