Why Is It Necessary to Adjust the Individual Confidence Level

question 9

Multiple Choice

Why is it necessary to adjust the individual confidence level of each confidence interval for a multiple comparison of means procedure?

• A) The total probability of the intervals being correct will always be less than the probability of any single confidence interval covering a single mean difference.
• B) Each confidence interval is slightly biased and the correction will alleviate that bias.
• C) The intervals will not be able to detect slight differences in means without a correction.
• D) Confidence intervals are always estimates; so, when considering of them, an adjustment is needed to allow for valid inference.

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Definitions:

Original Cost

Original Cost refers to the initial monetary value of an asset or investment at the time of purchase, before any depreciation, amortization, or impairment charges are applied.

Accumulated Depreciation

The cumulative depreciation expense registered for an asset from the time it was initially utilized.

Commercial Substance

An accounting principle that transactions should result in a real change to the economic circumstances of a company, as opposed to being conducted for appearance's sake.

Invoice Price

The amount shown on an invoice as the price of goods or services, prior to any discounts or adjustments.