SCENARIO 9-9 The President of a University Claimed That the Entering Class

question 70

True/False

SCENARIO 9-9
The president of a university claimed that the entering class this year appeared to be larger than the
entering class from previous years but their mean SAT score is lower than previous years.He took a
sample of 20 of this year's entering students and found that their mean SAT score is 1,501 with a
standard deviation of 53.The university's record indicates that the mean SAT score for entering
students from previous years is 1,520.He wants to find out if his claim is supported by the evidence
at a 5% level of significance.
-True or False: Referring to Scenario 9-9, the null hypothesis would be rejected.

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Definitions:

Zero-coupon Bond

A bond that does not pay periodic interest and is sold at a discount to its face value, with the full face value repaid at maturity.

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, as stated by the issuer.

Forward Interest Rate

Rate of interest for a future period that would equate the total return of a long-term bond with that of a strategy of rolling over shorter-term bonds.

Yield Curve

A graph that plots the interest rates at a set point in time of bonds having equal credit quality but differing maturity dates, typically used to predict economic changes.