TABLE 8-2 A Wealthy Real Estate Investor Wants to Decide Whether It

question 113

Short Answer

TABLE 8-2
A wealthy real estate investor wants to decide whether it is a good investment to build a high-end shopping complex in a suburban county near Chicago. His main concern is the total market value of the 3,605 houses in the suburban county. He commissioned a statistical consulting group to take a sample of 200 houses and obtained a sample mean market price of $225,000 and a sample standard deviation of $38,700. The consulting group also found out that the mean differences between market prices and appraised prices was $125,000 with a standard deviation of $3,400. Also the proportion of houses in the sample that are appraised for higher than the market prices is 0.24.
-Referring to Table 8-2, what will be the 90% confidence interval for the population proportion of houses that will be appraised for higher than the market prices?

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Definitions:

Means Test

A process to determine an individual's eligibility for certain financial assistance programs based on income and assets.

Bankruptcy Process

A legal proceeding involving a person or business that is unable to repay their outstanding debts, which allows for the liquidation or reorganization of assets.

Higher-income People

Individuals or households that earn a significantly above-average level of income compared to the general population.

Chapter 7 Bankruptcy

involves the liquidation of a debtor's non-exempt assets by a trustee to pay creditors, part of the U.S. Bankruptcy Code.