Question

Question 2.4. This shows that the percentage in a normal distribution that is at most 1.65 SDs above average is about 95%. Explain why 1.65 is the right number of SDs to use when constructing a 90% confidence interval. (6 Points)

Answer 1

1.65 is the right number of SDs to use when constructing a 90% confidence interval because it corresponds to the upper 5th percentile of a normal distribution, which gives a 5% chance of the true population parameter being outside the interval.