Sometimes It May Be Better to Use Savings Rather Than

question 57

Multiple Choice

Sometimes it may be better to use savings rather than borrow to make a purchase.This would be recommended when

• A) the borrower has adequate savings.
• B) interest rates are rising.
• C) interest rates are falling.
• D) the cost of borrowing is greater than the interest earned on the savings.
• E) interest earned on savings is greater than the interest paid on the loan.

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Definitions:

Population Parameter

A characteristic or measure that describes an aspect of an entire population, such as its mean, variance, or proportion.

Sample Statistic

A numerical measure that describes an attribute of a sample of a population.

Sample Variance

A measure of the dispersion or spread of a set of data points in a sample, quantifying how much the data deviate from the mean.

Population Variance

A measure of the spread between numbers in a dataset, representing the average of the squared differences from the Population Mean.