A Required Condition for Using the Normal Approximation to the Binomial

question 77

True/False

A required condition for using the normal approximation to the binomial in testing the difference between two population proportions is that n₁p₁ $\ge$ 30 and n₂p₂ $\ge$ 30.

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Definitions:

Callable Bond

A type of bond that the issuer has the right to repay before its maturity date, at a predetermined call price.

Sinking Fund

A reserve fund established by a company to repay debt or replace a major asset in the future.

Income Bond

A type of bond that only pays interest if the issuing corporation has earned enough income to cover the interest payments, often used by companies in financial distress.

Registered Form

Registrar of company records ownership of each bond; payment is made directly to the owner of record.