Two Years Ago, Harold Inherited $30,000 and Decided to Open

question 8

Multiple Choice

Two years ago, Harold inherited $30,000 and decided to open a coffee shop in his hometown instead of buying stock in Ford Motor Company. The rate of return he could have earned on his investment in Ford stock represents his

• A) lost profit.
• B) opportunity cost of funds.
• C) investment opportunity.
• D) potential profit.

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Definitions:

Confidence Interval

A range of values within which there is a specified probability that the true parameter value lies.

Population Standard Error

A measure that estimates the variability or dispersion of a population parameter based on a sample.

Mean

The average of a set of numbers, calculated by adding all the values together and dividing by the number of values.

Sample Mean

Mean calculated from data for a sample.