Question

A corporation is considering a new issue of convertible bonds. Management believes that the offer terms will be found attractive by 20% of all its current stockholders.
Suppose that this belief is correct. A random sample of 130 current stockholders is taken.
a. What is the standard error of the sample proportion who find this offer attractive?
b. What is the probability that the sample proportion is more than 0.15?
c. What is the probability that the sample proportion is between 0.18 and 0.22?
d. Suppose that a sample of 500 current stockholders had been taken. Without doing the calculations, state whether the probabilities in parts (b) and (c) would have been higher, lower, or the same as those found.


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  • CreatedJuly 07, 2015
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