Under What Conditions Can the T-Distribution Be Correctly Employed to Test

question 161

Multiple Choice

Under what conditions can the t-distribution be correctly employed to test the difference between two population means?

• A) The samples must be small and selected at random from the population.
• B) The samples must be independent of each other.
• C) The population variances should be equal or nearly equal, and the populations must be normally distributed.
• D) All of these.
• E) None of these.

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Definitions:

Constant Growth Model

A method to value a stock by assuming that dividends grow at a constant rate indefinitely.

Dividend Yield

The ratio of a company's annual dividend payments to its share price, indicating the earning potential from dividends for investors.

Required Return

An annual return rate set as the minimum to attract investment from persons or entities into a specific security or project.

Dividend Growth Rate

The annualized percentage rate of growth of a company's dividends per share.