The Amount Spent on Textbooks for the Fall Term Was

question 59

Multiple Choice

The amount spent on textbooks for the fall term was recorded for a sample of five hundred university students. The mean expenditure was calculated to be $500 and the median expenditure was calculated to be $425. Which of the following interpretations of the mean is correct?

• A) 50% of the students sampled had textbook costs that were less than $500
• B) The average of the textbook costs sampled was $500
• C) 50% of the students sampled had textbook costs equal to $500
• D) The most frequently occurring textbook cost in the sample was $500

---

Definitions:

Maximum Cost

The highest possible expense that can be incurred for a specific activity, project, or purchase.

Method

A systematic way of accomplishing something. In a financial context, this could refer to a specific approach or procedure adopted for accounting or analysis purposes.

Average Rate of Return Method

A method of evaluating capital investments by calculating the average annual profit expected from the investment and dividing it by the initial investment cost.

Present Value

The contemporary valuation of a future money sum or cash flow series, based on a predetermined return rate.