SCENARIO 8-15 A Wealthy Real Estate Investor Wants to Decide Whether It

question 45

Short Answer

SCENARIO 8-15
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 in 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 Scenario 8-15,what will be the 90% confidence interval for the total difference between the market prices and appraised prices of the houses in the suburban county constructed by the consulting group?

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Definitions:

Agricultural Act

Legislation aimed at regulating agricultural markets, prices, and subsidies; specifics depend on the country and the time period.

Food, Conservation, and Energy Act

A law enacted by the United States governing agriculture, forestry, and food policy, also known as the 2008 Farm Bill.

Freedom to Farm Act

Legislation aimed at reducing government restrictions on farming, allowing farmers more freedom in deciding what crops to plant and how to manage their land.

Conservation Reserve Program

A U.S. government program designed to reduce agricultural production by compensating farmers for not planting part of their land to improve environmental quality.