Suppose the standard deviation of the losses had been $3000 instead of $1000. What would the larger standard deviation do to the width of the confidence interval (assuming the same level of confidence) ?

Question

Peyton Barton

Business

25 June, 14:25

Suppose the standard deviation of the losses had been $3000 instead of $1000. What would the larger standard deviation do to the width of the confidence interval (assuming the same level of confidence) ?

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Answers (1)

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Rosa Harrell · Answer 1

As the standard deviation increases from $1000 to $3000, this will cause the confidence interval to go more wider.

Explanation:

Confidence interval is a tool used by many statisticians to take out the estimate amount of uncertainty which is associated when a sample estimate is taken out of a population parameter.

Standard deviation is a tool which is used to measure the amount of variations and when this standard deviation increases this means that the amount variations also increases and thus the confidence interval will go more wider as standard deviation shifts from $1000 to $4000 as given in this case.