2.According to www. city-data, the mean price for a detached house in Franklin County, OH in 2009 was $192,723. Suppose we know that the standard deviation was $42,000. Check the three assumptions associated with the Central Limit Theorem. What is the probability that a random sample of 75 detached houses in Franklin County had a mean price greater than $190,000 in 2009

0.7123 = 71.23% probability that a random sample of 75 detached houses in Franklin County had a mean price greater than $190,000 in 2009.

Step-by-step explanation:

To solve this question, we need to understand the normal probability distribution and the central limit theorem.

Normal Probability Distribution

Problems of normal distributions can be solved using the z-score formula.

In a set with mean and standard deviation , the z-score of a measure X is given by:

The Z-score measures how many standard deviations the measure is from the mean. After finding the Z-score, we look at the z-score table and find the p-value associated with this z-score. This p-value is the probability that the value of the measure is smaller than X, that is, the percentile of X. Subtracting 1 by the p-value, we get the probability that the value of the measure is greater than X.

Central Limit Theorem

The Central Limit Theorem establishes that, for a normally distributed random variable X, with mean and standard deviation , the sampling distribution of the sample means with size n can be approximated to a normal distribution with mean and standard deviation .

For a skewed variable, the Central Limit Theorem can also be applied, as long as n is at least 30.

The mean price for a detached house in Franklin County, OH in 2009 was $192,723. Suppose we know that the standard deviation was $42,000.

This means that

Sample of 75:

This means that

What is the probability that a random sample of 75 detached houses in Franklin County had a mean price greater than $190,000 in 2009?

1 subtracted by the p-value of Z when X = 190000. So

By the Central Limit Theorem

has a p-value of 0.2877

1 - 0.2877 = 0.7123

0.7123 = 71.23% probability that a random sample of 75 detached houses in Franklin County had a mean price greater than $190,000 in 2009.

an advantage of the standard deviation is that it increases as the dispersion of the data increases. e. the interquartile range is preferred when the data are not skewed or no have outliers. an advantage of the standard deviation is that it uses all the observations in its computation.