Tradepoint, the electronic market set up to compete with the London Stock Exchange, is losing on average $32,000 per day. A potential long-term financial partner for Tradepoint needs a confidence interval for the actual (population) average daily loss, in order to decide whether future prospects for this venture may be profitable. In particular, this potential partner wants to be confident that the true average loss at this period is not over $35,000 per day, which it would consider hopeless. Assume the $32,000 figure given above is based on a random sample of 10 trading days, assume a normal distribution for daily loss, and assume a standard deviation of s = $6,000.
Construct a 95% confidence interval for the average daily loss in this period. What decision should the potential partner make?

  • CreatedJune 03, 2015
  • Files Included
Post your question