Q&A: How to produce a smaller margin of error...

...given this porfolio?

A: The width of a confidence interval is reduced by

  • using a lower level of confidence. ie. for a normal variable, noticed the reliability factors increase with higher level of confidence, which in turn lead bigger Point Estimate +/- Reliability Factor * Standard Error = Confidence Interval
  • Increasing the sample size: the standard error of the sample mean declines as the sample size increases.

Category: Quantitative Analysis > Probability

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