A study by the Investment Company Institute (ICI), which randomly surveyed 3,500 households and drew on information from the Internal Revenue Service, found that 72% of households have funded at least one IRA rollover from an employer-sponsored retirement plan (www.financial-planning.com). Suppose a recent random sample of 90 households in the greater Miami area was taken and respondents were asked whether they had ever funded an IRA account with a rollover from an employer-sponsored retirement plan. The results are in the file Miami Rollover.
a. Based on the random sample of Miami households, what is the best point estimate for the proportion of all Miami households that have ever funded an IRA account with a rollover from an employer-sponsored retirement plan?
b. Construct a 99% confidence interval estimate for the true population proportion of Miami households that had ever funded an IRA account with a rollover from an employer-sponsored retirement plan.
c. If the sponsors of the Miami study found that the margin of error was too high, what could they do to reduce it if they were not willing to change the level of confidence?