TABLE 12-4 A Computer Used by a 24-Hour Banking Service Is Supposed

question 45

Multiple Choice

TABLE 12-4
A computer used by a 24-hour banking service is supposed to randomly assign each transaction to one of 5 memory locations. A check at the end of a day's transactions gave the counts shown in the table to each of the 5 memory locations, along with the number of reported errors.

The bank manager wanted to test whether the proportion of errors in transactions assigned to each of the 5 memory locations differ.
-Referring to Table 12-4, which test would be used to properly analyze the data in this experiment?

• A) X² test of independence
• B) X² test for difference among more than two proportions
• C) McNemar test for the difference between two proportions
• D) McNemar test for the difference among more than two proportions

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Definitions:

Underwriting Expenses

Costs associated with assessing and accepting risk, such as those incurred by insurers or investment banks during the offering process of securities.

Bond Refunding

The process of refinancing an existing bond issue by raising new debt at lower interest rates to pay off the old bonds before they mature.

Yield Curve

A graph that plots the interest rates of bonds having equal credit quality but differing maturity dates, typically showing the relationship between short-term and long-term bond yields.

Long-Term Rates

Interest rates applied to loans or debt instruments, such as bonds, with a maturity of over a year.