Ophelia O'Brien, VP of Consumer Credit of American First Banks

question 79

Multiple Choice

Ophelia O'Brien, VP of Consumer Credit of American First Banks (AFB) , is designing a p chart to monitor the default rate on personal loans at the AFB member banks.Her data include the proportion in default for 30 samples of personal loans.Each sample contains 50 loans, and the average of the 30 proportions is 0.05.The centerline for Ophelia's p chart is _____________.

• A)30
• B)0.50
• C)50
• D)1.5
• E)0.05

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Definitions:

Corporate Securities

Refers to financial instruments issued by corporations, such as stocks and bonds, representing an ownership stake or a debt obligation.

Ponzi Scheme

A fraudulent investing scam promising high rates of return with little risk to investors, which generates returns for older investors through revenue paid by new investors, rather than from legitimate business activities.

Sarbanes-Oxley Act

An act that criminalizes specific nonaudit services when provided by a registered accounting firm to an audit client; also increases the punishment for a number of white-collar offenses. Also known as the Public Company Accounting Reform and Investor Protection Act of 2002.

Investment Company Act

A U.S. federal law enacted in 1940 aimed at regulating investment companies to protect investors by enforcing transparency and reducing conflicts of interest.