Apply the Central Limit Theorem

question 10

Multiple Choice

Apply the Central Limit Theorem.
-A small business ships specialty homemade candies to anywhere in the world. Past
Records indicate that orders weigh an average of 118 grams with a standard deviation of
14 grams. Suppose a random sample of 50 current orders is selected and each weighed.
The sampling distribution of the sample mean weights is normally distributed with a
Mean of 118 grams and standard deviation of 1.98. We can say this because

• A) the sample size is not too large.
• B) the Central Limit theorem applies.
• C) the Normal Probability theorem applies.
• D) All of the above.
• E) None of the above.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock and typically doesn't have voting rights.

Income Earned

Revenue received from work performed or services provided, often used interchangeably with earned income.

Common Stock

A type of security that represents ownership in a corporation, entitling the holder to dividends and voting rights.

Stockholders' Equity

The equity stake that shareholders have in a company, representing their ownership interest, which is calculated as total assets minus total liabilities.