Send money, again. The philanthropic organization in Exercise 1 expects about a 5% success rate when they send fundraising letters to the people on their mailing list. In Exercise 1 you looked at the histograms showing distributions of sample proportions from 1000 simulated mailings for samples of size 20, 50, 100, and 200. The sample statistics from each simulation were as follows:

a) According to the Central Limit Theorem, what should the theoretical mean and standard deviations be for these sample sizes?

b) How close are those theoretical values to what was observed in these simulations?

c) Looking at the histograms in Exercise 1, at what sample size would you be comfortable using the Normal model as an approximation for the sampling distribution?

d) What does the Success/Failure Condition say about the choice you made in part c?

Exercise 1:

Send money. When they send out their fundraising letter, a philanthropic organization typically gets a return from about 5% of the people on their mailing list. To see what the response rate might be for future appeals, they did a simulation using samples of size 20, 50, 100, and 200. For each sample size, they simulated 1000 mailings with success rate p = 0.05 and constructed the histogram of the 1000 sample proportions, shown below. Explain how these histograms demonstrate what the Central Limit Theorem says about the sampling distribution model for sample proportions. Be sure to talk about shape, center, and spread.