A Financial Analyst Would Like to Construct a 95% Confidence

question 42

Short Answer

A financial analyst would like to construct a 95% confidence interval for the mean earnings of a company. The company's earnings have a standard deviation of $12 million. What is the minimum sample size required by the analyst if he wants to restrict the margin of error to $2 million?

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Definitions:

Profit Maximization

is the process or strategy by which a firm adjusts its production and sale levels to achieve the highest possible profit.

Price Takers

Firms or individuals who accept the market price as given and have no influence to change it.

Product Variety

The range of different goods or services offered by a company or available in a market.

Competitive Price-Searcher

A market participant who sets their prices based on competition and market conditions, often adjusting to attract consumers while remaining profitable.