The following values represent the population of home mortgage ...

[joblessjake]

The following values represent the population of home mortgage interest rates (in percents) being charged by the banks in a particular city:
 
  6.9 7.5 6.5 7 7.3 6.8 6.5
  7 7 7.2 7.5 7.8 6 7
 
  Given this information, what is the most extreme amount of sampling error possible if a random sample of n = 4 banks is surveyed and the mean loan rate is calculated?
  A) -0.55 percent
  B) 0.52 percent
  C) 1.08 percent
  D) Can't be determined without more information.

Question 2

Under what circumstances would you wish to select a pilot sample?
 
  What will be an ideal response?

[courtney_bruh]

Answer to Question 1

A

Answer to Question 2

A pilot sample is used when we wish to determine a required sample size to estimate a population mean or a population proportion. The pilot sample is a sample that is smaller than the final sample that will be needed to complete the estimation. It is used to obtain information about the variation in the population. In the case where we wish to estimate a population mean, in most cases we don't know what the population standard deviation is. From a pilot sample, we compute s, the sample standard deviation and use that value in the sample size computation. When we wish to estimate a population proportion, the pilot sample is used to get an idea of what p is. From the pilot sample, we compute p, the sample proportion and use that in the sample size formula.
It should be remembered that the pilot sample is selected in the same manner as the final sample will be selected. Thus, the pilot sample can be used as part of the overall sample.