MA145-B Assignment 3

Confidence Intervals

The objectives of this assignment are:

• To introduce spreadsheet functions used in place of tables for:
  • Normal probabilities
  • student's t probabilities
  • binomial probabilities
• To illustrate the use of a spreadsheet to calculate confidence intervals
• To illustrate the properties of confidence intervals
• To illustrate the effect of varying alpha levels
• To illustrate Monte Carlo techniques

Materials for this assignment consist of:

• A spreadsheet for the Monte Carlo experiment.
• A list of instructions and questions relating to the spreadsheet and the assignment in general.

Monte Carlo Experiments

Simulation experiments that rely on computer-generated random numbers instead of real world samples are known as Monte Carlo studies.

In this assignment, a spreadsheet will be used which generates 10 samples with 54 observations each from a normal population with a specified mean and standard deviation.

The spreadsheet will calculate upper and lower 1-alpha percent confidence intervals using both the student's t and normal distributions, for any specified alpha level.

A separate sheet computes the probability that exactly k and fewer than k of the 10 computed confidence intervals contain the population mean.