Which of the Following Approaches Would Not Be Acceptable in Estimating

question 69

Multiple Choice

Which of the following approaches would not be acceptable in estimating the population standard deviation?

• A) use the exact amount found in last year's audit.
• B) use available book values.
• C) adjust the amount found last year based on changed conditions.
• D) use the rate found in a preliminary sample of approximately five to ten items.
• E) use the rate found in a preliminary sample of approximately thirty to fifty items.

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Definitions:

Dollar-Weighted Returns

A technique for determining the yield of an investment by considering both the magnitude and timing of the cash inflows and outflows associated with it.

Geometric Returns

The average rate of return per period on an investment, calculated by compounding the returns over time.

Excess Returns

The return on an investment minus the return on a benchmark, indicating the performance of the investment relative to the market.

Historical Standard Deviation

A statistical measure that quantifies the variability or dispersion of a set of past data points.