The introduction to confidence intervals was clear and informative. I, however, had problems understanding why we the desired probability had been set at 95% and not any other percentage for intervals. I did also not understand how we got to the answers in the one sample intervals. It would have been great if a new question was developed for this particular topic so that one can get to see how the formulas flow. The guidelines provided regarding overlapping intervals also need more elaboration. In general, the topic seems to be easy but understanding it needs more questions in class with different approaches so that everything can be clear. Calculating the confidence interval using excel also needs more elaboration because not all questions are the same.
In Business economics, confidence interval serves as a very important tool because it aids in the prediction and estimation of future events. Businesses are therefore able to evaluate their reliability with reference to a particular estimate. Market research forms a fundamental part of every organization and through this statistical technique, it can be used to provide an estimation of what future sales may be. It may difficult to determine its collective sales within a financial year, but through the use of C.I, past data can be used to provide an approximation of what the range will be. In addition to this, it is also used as a risk management tool to show the likelihood of a risk occurring thus providing room for making plans to act before it happens. As a statistical instrument, it can also be applied in businesses for making budget forecasts for a given fiscal period. The figures from these estimations can be used by businesses to make critical financial decisions that will determine their profitability and performance in the market.
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