The Manager of the Service Department of a Local Car

question 32

Multiple Choice

The manager of the service department of a local car dealership has noted that the service times of a sample of 30 new automobiles has a standard deviation of 5 minutes. A 95% confidence interval estimate for the standard deviation of the service times (in minutes) for all their new automobiles is

• A) 16.047 to 45.722.
• B) 15.857 to 45.180.
• C) 3.982 to 6.722.
• D) 22.833 to 65.059.

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Definitions:

Portfolio Theory

A framework for constructing a portfolio of assets in such a way that it optimizes the balance between risk and return.

Risk Aversion

The reluctance to take on investments with higher levels of uncertainty or potential for loss.

Accepting Risk

Accepting risk involves recognizing and undertaking the chance of loss or damage in the expectation of a potential gain.

Systematic Risk

The risk inherent to the entire market or an entire market segment, also known as non-diversifiable risk or market risk.