A Federal Bank Examiner Is Interested in Estimating the Mean

question 65

Multiple Choice

A federal bank examiner is interested in estimating the mean outstanding defaulted loans balance of all defaulted loans over the last three years. A random sample of 20 defaulted loans yielded a mean of $67,918 with a standard deviation of $16,552.40. Calculate a 90 percent confidence interval for the mean balance of defaulted loans over the past three years.

• A) [66,487, 69,349]
• B) [39,299, 96,537]
• C) [57,329, 78,507]
• D) [61,829, 74,007]
• E) [61,518, 74,318]

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Definitions:

Widgets

A generic term for any hypothetical or unspecified product or manufactured good used in discussions of business and economics.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product or service.

Producer Surplus

The variation between the price that sellers expect to receive for a product or service and the actual price they end up getting.

Consumer Surplus

The difference between the maximum amount that consumers are willing to pay for a good or service and the amount they actually pay.