A Theorem That Allows Us to Use the Normal Probability

question 16

Multiple Choice

A theorem that allows us to use the normal probability distribution to approximate the sampling distribution of sample means and sample proportions whenever the sample size is large is known as ________.

• A) cluster sampling
• B) sampling error
• C) sampling distribution of the mean
• D) the Central Limit Theorem

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Definitions:

Market Risk Premium

The additional return that an investor requires for choosing a risky market investment over a risk-free investment.

Beta

A measure of a stock's volatility in relation to the overall market, used to gauge the risk associated with a particular investment.

Beta Coefficient

A measure of a stock's volatility in relation to the overall market, indicating its risk level.

Market

An area or arena in which commercial dealings are conducted, often defined by the exchange of goods, services, or information between buyers and sellers.