Answer
Confidence interval: $-0.679\lt y\lt35.313$
We are 95% confident that the mean stock return is between -0.679 and 35.313 percent.
Work Step by Step
So, according to the previous item we can not use the least-squares regression equation as we used in the previous problems (7, 8, 9, ...). We will use the methods from section 9.2
In MINITAB, enter the Stock Return values in C2.
Select Stats -> Basic Stas -> Display Descriptive Statistics
In Variables enter C1 and click in Statistics.
Select "Mean" and "Standard deviation". Click OK.
Click Ok.
$Mean=y ̅=17.317$ and $s=25.159$
$n=10$, so:
$d.f.=n-1=9$
$level~of~confidence=(1-α).100$%
$95$% $=(1-α).100$%
$0.95=1-α$
$α=0.05$
$t_{\frac{α}{2}}=t_{0.025}=2.262$
(According to Table VI, for d.f. = 9 and area in right tail = 0.025)
$Lower~bound=y ̅-t_{\frac{α}{2}}.\frac{s}{\sqrt n}=17.317-2.262\times\frac{25.159}{\sqrt {10}}=-0.679$
$Upper~bound=y ̅+t_{\frac{α}{2}}.\frac{s}{\sqrt n}=17.317+2.262\times\frac{25.159}{\sqrt {10}}=35.313$
