Which of the Following Is True About Using Sample Data

question 20

Multiple Choice

Which of the following is true about using sample data?

• A) All samples have the same characteristics and hence always adequately represent the underlying population.
• B) It can limit the ability to predict uncertain events that may occur because potential values outside the range of the sample data are not included.
• C) It is better to use sample data than trying to identify the underlying probability distribution and fitting a theoretical distribution to it.
• D) Using sample data in a decision model increases the ability to predict uncertain events.

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Definitions:

Lubricants

Substances applied to reduce friction between surfaces in mutual contact, which ultimately decreases the heat generated when the surfaces move.

Period Cost

Expenses incurred by a business that are not directly tied to production activities, such as administrative and selling expenses.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and are a significant portion of the total production cost.

Administrative Expense

Costs related to the general management and administration of a company, such as salaries of executive personnel, accounting departments, and front office.