Which of the Following Does Not Apply to the Relative-Frequency

question 16

Multiple Choice

Which of the following does not apply to the relative-frequency approach for trying to determine a probability of a specific outcome?

• A)The probability is determined to be the proportion of times the outcome occurs in the long run.
• B)The relative frequency jumps around if only a few observations are made, but eventually settles down to a certain proportion as more and more observations are made.
• C)The relative frequency approach to determining a probability can be applied to short-term observation.
• D)All of the above statements apply to the relative-frequency approach.

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Definitions:

Residual Income

The amount of income that an individual or company has after all personal debts and expenses, including the cost of capital, have been paid.

Transfer Price

Transfer price is the price at which goods and services are transferred between departments or subsidiaries of the same company.

Market Price

The current price at which an asset or service can be bought or sold in the marketplace.

Supplying Division

The department or unit within a company that is responsible for providing the materials, products, or services to other divisions or departments within the same company.