Here are the essential concepts you must grasp in order to answer the question correctly.
Critical Value (zc)
The critical value, denoted as zc, is a point on the standard normal distribution that corresponds to a specified level of confidence. It defines the boundaries of the confidence interval, indicating how far from the mean we can expect the true population parameter to lie with a certain level of certainty. For example, a confidence level of 80% means that 80% of the distribution lies within zc standard deviations from the mean.
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Confidence Interval
A confidence interval is a range of values, derived from sample statistics, that is likely to contain the true population parameter with a specified level of confidence. It is calculated using the sample mean, the critical value, and the standard error. For instance, an 80% confidence interval suggests that if we were to take many samples, approximately 80% of the calculated intervals would contain the true parameter.
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Standard Normal Distribution
The standard normal distribution is a probability distribution that has a mean of 0 and a standard deviation of 1. It is used to determine the critical values for various confidence levels. By converting a normal distribution to a standard normal distribution, we can easily find zc values using z-tables or statistical software, which helps in constructing confidence intervals.
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