Question: An analyst would like to construct 95% confidence intervals of the mean returns of two mutual funds. Fund A is a high risk fund with a known population standard deviation of 20.6%, whereas the Fund B is a lower-risk fund with a known population standard deviation of 12.8%.
a. What is the minimum sample size required by the analyst if she wants to restrict the margin of error to 4% for Fund A?
b. What is the minimum sample size required by the analyst if she wants to restrict the margin of error to 4% for Fund B?
c. Why do the above results differ if they use the same margin of error?