A Manager of the Credit Department for an Oil Company

question 162

Multiple Choice

A manager of the credit department for an oil company would like to determine whether the average monthly balance of credit card holders is equal to $75. An auditor selects a random sample of 100 accounts and finds that the average owed is $83.40 with a sample standard deviation of $23.65. If you were to conduct a test to determine whether the auditor should conclude that there is evidence that the average balance is different from $75, which test would you use?

• A) Z-test of a population mean
• B) Z-test of a population proportion
• C) t-test of a population proportion
• D) t-test of population mean

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Definitions:

Probability

The likelihood or chance of an event occurring, expressed as a number between 0 and 1.

Parameter Data

Data or values that define or control the behavior of a mathematical function or system.

Nominal Data

This data type categorizes variables without a natural order or ranking among the categories.

Ordinal Data

A type of categorical data in which the order of values is significant, but the differences between values are not necessarily consistent.