SCENARIO 9-2
a Student Claims That He Can Correctly Identify $\beta$

question 177

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 is the value of $\beta$ ?

• A)0.13
• B)0.16
• C)0.84
• D)0.87

---

Definitions:

Understandability

It refers to the quality of financial information that enables users to perceive its significance.

Relevance

The importance or usefulness of information for decision-making purposes in various contexts.

Decision Usefulness

The quality of financial information that makes it valuable for users in making informed decisions.

Revenue Recognition

The accounting principle that determines the specific conditions under which revenue is recognized as earned.