A Brokerage Firm Needs Information Concerning the Standard Deviation of the Account

question 114

Essay

A brokerage firm needs information concerning the standard deviation of the account balances of its customers.From previous information it was assumed to be $250. A random sample of 61 accounts was checked. Thestandard deviation was $286.20. At α = 0.01, test the firmʹs assumption. Assume that the account balances arenormally distributed.

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Definitions:

Overhead

Fixed costs that are not directly tied to production levels, such as rent, utilities, and administrative expenses, affecting a company's profitability.

Variable Costs

Expenses that change in proportion to the activity of a business, such as costs for raw materials or production volume.

Shut Down

A short-term decision by a firm to cease operations temporarily due to unfavorable market conditions.

ATC Curve

Average Total Cost Curve; a graph that shows the per-unit cost of production at every level of output.