A 90% Confidence Interval for the Average Salary of All

question 69

Multiple Choice

A 90% confidence interval for the average salary of all CEOs in the electronics industry was constructed using the results of a random survey of 45 CEOs. The interval was
($146,132, $156,381) . Give a practical interpretation of the interval.

• A)We are 90% confident that the mean salary of the sampled CEOs falls in the interval $146,132 to $156,381.
• B)90% of all CEOs in the electronics industry have salaries that fall between $146,132 to $156,381.
• C)We are 90% confident that the mean salary of all CEOs in the electronics industry falls in the interval $146,132 to $156,381.
• D)90% of the sampled CEOs have salaries that fell in the interval $146,132 to $156,381.

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Definitions:

Returns

The profit or loss generated on an investment over a specific period, usually expressed as a percentage.

Sharpe Measure

A ratio used to evaluate the risk-adjusted return of an investment, calculated by subtracting the risk-free rate from the return of the investment and dividing by the investment's standard deviation.

Excess Returns

Returns on an investment that exceed the benchmark or risk-free return, often used as a measure of the performance of investment managers.

Risk-free Asset

An investment that is expected to deliver its promised returns without any risk of financial loss, typically associated with government bonds.