SCENARIO 9-2 a Student Claims That He Can Correctly Identify Whether a Whether

question 47

Multiple Choice

SCENARIO 9-2
A student claims that he can correctly identify whether a person is a business major or an agriculture major by the way the person dresses.Suppose in actuality that if someone is a business major,he can correctly identify that person as a business major 87% of the time.When a person is an agriculture major,the student will incorrectly identify that person as a business major 16% of the time.Presented with one person and asked to identify the major of this person (who is either a business or an agriculture major) ,he considers this to be a hypothesis test with the null hypothesis being that the person is a business major and the alternative that the person is an agriculture major.
-Referring to Scenario 9-2,what would be a Type II error?

• A)Saying that the person is a business major when in fact the person is a business major.
• B)Saying that the person is a business major when in fact the person is an agriculture major.
• C)Saying that the person is an agriculture major when in fact the person is a business major.
• D)Saying that the person is an agriculture major when in fact the person is an agriculture major.

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Definitions:

Equity

The value of ownership interest in a company, represented by the shares held by investors.

Depreciation Expense

An accounting method that allocates the cost of a tangible asset over its useful life, representing the wear and tear, deterioration, or obsolescence of the asset.

Interest Expense

The cost incurred by an entity for borrowed funds over a period of time, typically reported on the income statement.