# Sampling and estimation

http://imgur.com/4cGwr1J

can anyone break this calculation down and explain it to me please. I am really finding it hard

to grasp this concept.

This is a standard Z-test. You take the normalized z-score by subtracting the value from the mean and dividing the standard deviation. In this case that would be (16-20)/4 or -1. Using your z table, you find that -1 is about 16% (really, its .1587). So that means that the probablility that the real mean is BELOW that value is 16%. However, they are asking about the probability in excess of that value.

You can just subtract that value by 100% to get 84%.

It’s just trying to be a little tricky about the above/below probability.

Looks like the “correct” choice does not show the correct answer. It still says that the probability of getting a return in excess of 16% is only 0.16. Should show 0.84, right?

Right, the question is to indicate the statement that is the least accurate.

To say that the probability of receiving a return in excess of 16% is .16 is very inaccurate. The actual answer is .84.