When Constructing a Confidence Interval, an Increase in Sample Size

question 79

Multiple Choice

When constructing a confidence interval, an increase in sample size will:

• A)increase the margin of error and increase the standard error
• B)increase the margin of error and decrease the standard error
• C)decrease both the margin of error and the standard error
• D)increase both the margin of error and the standard error
• E)will have no effect on the confidence interval

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Definitions:

Quoted

Refers to stating the current price of a stock, bond, commodity, or any financial instrument, or the most recent bid and ask prices available.

Yield To Maturity

The cumulative earnings forecasted from a bond assuming it is kept until its expiration date.

Annual Coupon

The yearly interest payment made to bondholders, generally expressed as a percentage of the bond's face value.

Face Value

The face value or the amount in dollars shown on a bond, note, or any financial instrument, representing its value upon reaching maturity.