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You can't afford to be wrong - at 99% you're saying that you'll be wrong one time out of 100! So you draw a big circle. If the person asking doesn't even like donuts, they're just asking for the heck of it, you can be 90% accurate, so you can take a chance and draw a small circle. You'll be wrong 10% of the time.
1. A person claims to be able to predict the outcome of flipping a coin. This person is correct 16/25 times. Compute the 95% confidence interval on the proportion of times this person can predict coin flips correctly. What conclusion can you draw about this test of his ability to predict the future? Solution)
WE HAVE GIVEN THAT n = 25 and p = 16/25 And we need to construct the 95% C.I. for the proportion of times this person can predict coins flips correctly as
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