Suppose We Know That the Proportion of Objects in a Population

question 24

Multiple Choice

Suppose we know that the proportion of objects in a population that have a particular characteristic of interest is 0.10.Are there any concerns if we want to calculate probabilities for the sampling distribution of n = 40 using a normal approximation?

• A) Because nis large, our only concern with using a normal approximation will be the small amount of variability in the sampling distribution of .
• B) Because is small here, the sampling distribution of should not be assumed to be approximately normal.
• C) Because ≤ 0.5, the sampling distribution of should not be assumed to be approximately normal.
• D) If n < 5, then a normal approximation is not appropriate. ​

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Definitions:

Effective Interest Method

An accounting technique for amortizing bond premium or discount over the life of the bond in a way that reflects a constant interest rate.

Amortization Table

A schedule that details each payment on an amortizing loan (such as a mortgage), including how much of each payment is interest vs. principal and the remaining balance.

Semiannual Interest

Semiannual interest is interest that is calculated and paid twice a year on investments or loans.

Straight-Line Method

A depreciation technique that allocates an equal amount of depreciation expense over the useful life of an asset.