Reference no: EM131652386

Question: An investment advisor has worked with 24 clients for the past five years. Following are the percentage rates of average five-year returns that these 24 clients experienced over this time frame on their investments:

11.2      11.2       15.9       2.7       4.6       7.6       15.6        1.3       3.3         4.8         12.8        14.9

10.1      10.9       4.9       -2.1      12.5       3.7        7.6        4.9      10.2         0.4          9.6        -0.5

This investment advisor plans to introduce a new investment program to a sample of his customers this year. Because this is experimental, he plans to randomly select 5 of the customers to be part of the program. However, he would like those selected to have a mean return rate close to the population mean for the 24 clients. Suppose the following 5 values represent the average five-year annual return for the clients that were selected in the random sample:

11.2      -2.1       12.5       1.3       3.3

Calculate the sampling error associated with the mean of this random sample. What would you tell this advisor regarding the sample he has selected?