The Management of a Department Store Is Interested in Estimating

question 60

Multiple Choice

The management of a department store is interested in estimating the difference between the mean credit purchases of customers using the store's credit card versus those customers using a national major credit card.You are given the following information. $$\begin{array} { l l l } & \text { Store's Card } & \text { Major Credit Card } \\\text { Sample size } & 64 & 49 \\\text { Sample mean } & \$ 140 & \$ 125 \\\text { Population standard deviation } & \$ 10 & \$ 8\end{array}$$ A point estimate for the difference between the mean purchases of all users of the two credit cards is

• A) 2.
• B) 18.
• C) 265.
• D) 15.

---

Definitions:

Risk Averse

describes a preference for avoiding risk, where individuals opt for the option with the least uncertainty in outcomes or potential losses.

Subjective Measure

A type of data collection or evaluation based on personal opinions, interpretations, points of view, emotions, and judgment.

Present Value

The present value is the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Interest

The cost of borrowing money, typically expressed as a percentage rate over the period of the loan, or the return earned on investments.