The Amount of Money Collected by a Snack Bar at a Large

question 37

Multiple Choice

The amount of money collected by a snack bar at a large university has been recorded daily for the past fiveyears. Records indicate that the mean daily amount collected is $4000 and the standard deviation is $450. Thedistribution is skewed to the right due to several high volume days (including football game days) . Supposethat 100 days were randomly selected from the five years and the average amount collected from those dayswas recorded. Which of the following describes the sampling distribution of the sample mean?

• A) normally distributed with a mean of $4000 and a standard deviation of $45
• B) normally distributed with a mean of $4000 and a standard deviation of $450
• C) normally distributed with a mean of $400 and a standard deviation of $45
• D) skewed to the right with a mean of $4000 and a standard deviation of $450

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Definitions:

CDOs

Collateralized Debt Obligations, a type of structured asset-backed security (ABS) with different tranches that can be impacted by mortgage, auto loan, and credit card debt defaults.

Rating Agencies

Companies that assess the financial strength of entities, like corporations and governmental bodies, and their ability to meet financial obligations, issuing ratings that reflect that assessment.

Valuation

A systematic process to determine the price at which a security should sell in financial markets.

Designated Market Maker

A designated market maker is a market participant responsible for maintaining liquidity in a financial market by buying and selling securities.