Private Colleges and Universities Rely on Money Contributed by Individuals

question 301

Multiple Choice

Private colleges and universities rely on money contributed by individuals and corporations for their operating expenses.Much of this money is put into a fund called an endowment,and the college spends only the interest earned by the fund.A recent survey of 8 private colleges in the United States collected information on the endowment amount.Based on this information,which of the following will you construct to learn about the mean endowment of all private colleges in the United States?

• A)Confidence interval estimate for the total using the Student's t distribution.
• B)Confidence interval estimate for the mean using the Student's t distribution.
• C)Confidence interval estimate for the proportion using the standard normal distribution.
• D)Confidence interval estimate for the difference between two means using the standard normal distribution.

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Definitions:

Defined Contribution Plan

A retirement plan where both the employee and employer contribute to an account, with the final benefit dependent on account performance.

Risk-free Return

The theoretical return on an investment with no risk of financial loss, typically less than the return on riskier investments.

Defined Contribution Plan

A retirement plan where an employee, employer, or both make contributions on a regular basis, with future benefits fluctuating based on investment earnings.