Posted by Jason L on .
A survey of community banks asked about the loan to deposit ratio (LTDR) a banks total loans as a percent of its total deposits. The mean LTDR for the 110 banks in the sample is xbar = 76.7 and the standard deviation is s = 12.3. In the text a 95% confidence interval (using a z score) is given for the mean LTDR for community banks. This solution is theoretically not completely correct. What should the interval be?
CI95 = mean + or - 1.96(sd divided by √n)
...where + or - 1.96 represents the 95% confidence interval using a z-table, sd = standard deviation, √ = square root, and n = sample size.
With your data:
CI95 = 76.7 + or - 1.96(12.3/√110)
Finish the calculation for your interval.