A Manufacturer Finds That in a Random Sample of 100

question 119

Multiple Choice

A manufacturer finds that in a random sample of 100 of its CD players, 96% have no defects. The manufacturer wishes to make a claim about the percentage of nondefective CD players and is prepared to exaggerate. What is the highest rate of nondefective CD players that the manufacturer
Could claim under the following condition?

His claim would not be rejected at the 0.05 significance level if this sample data were used. Assume that a left-tailed hypothesis test would be performed.

• A) 98.4%
• B) 96.5%
• C) 98.2%
• D) 96.6%

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Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, reflecting the company's financial condition.

Convertible Securities

Convertible Securities are financial instruments, such as bonds or preferred stocks, that can be converted into a specified number of other securities, typically common stock, at the option of the holder or issuer.

Simple Capital Structure

A company's capital structure that consists only of common shares or straightforward debt without complex financial instruments such as convertible securities.

Diluted Earnings

Earnings per share calculated using the total number of shares that would be outstanding if all possible sources of conversion, such as convertible bonds and stock options, were exercised.