Question
How does the standard deviation contribute to the trade-off between the confidence level and the margin of error in interval estimation?
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Answer (136)
The standard deviation influences the trade-off by affecting the required margin of error for a given confidence level. A larger standard deviation necessitates a larger margin of error, even if the confidence level is held constant. To maintain a smaller margin of error with a large standard deviation, one might need to accept a lower confidence level or increase the sample size (which affects the margin of error inversely through the standard error).