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Chapter 15. Making Investment Decisions ... > Understanding Confidence Intervals

Understanding Confidence Intervals

In many situations, it is either too expensive or completely impossible to acquire all the information that would allow you to make a decision with 100% confidence.

Suppose you manufacture cars, and want to test how well the bumpers perform in a 15 mph crash. To conclude, “Less than $1,000 damage” with complete confidence, you'd have to test all your cars. And then you'd have nothing left to sell.


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