Say the level of the market as measured by the Dow Jones Industrial Average is currently at 12,000. A forecaster has made a prediction of 13,300 for the level of the market in one year, along with a 95% confidence interval whose lower bound is 12,500 and whose upper bound is 14,500. You know from experience that this particular forecaster tends to be both excessively optimistic and miscalibrated. Describe how you might de-bias this individual. Give a numerical example (making up relevant numbers as appropriate).
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In general, the 95% confidence interval states that, when repeated samples are taken from the same population, then 95 out of 100 times, the true mean will fall within this interval. In our study, we