Confidence Interval

A confidence interval is defined by two numbers, within which probably lies the parameter point of interest. It is arrived at by forming an interval around the point estimate (a value arrived at from the sample data that estimates the unknown population value) and is computed using either the normal distribution or the t distribution. The goal of the confidence interval is to help determine whether the forecast is trustworthy. So, if the forecast is trustworthy, the confidence estimate is small.

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