Suppose That a Group of 100 Consumers Are Asked to Rate

question 12

Multiple Choice

Suppose that a group of 100 consumers are asked to rate how much they liked the taste of a new soft drink on a 5-point scale (where 5 = good taste and 1 = poor taste) . The mean rating was 4.6, with a standard deviation of 1.25. Suppose, further, that the standard error of the mean for this study was 0.15. If you wanted to find the 95 per cent confidence interval (two-tailed test) , and if the Z-value at the .05 level of significance is 1.96, then the confidence interval lies between approximately:

• A) 4.45 and 4.75.
• B) 4.31 and 4.89.
• C) 4.36 and 4.85.
• D) 4.57 and 4.63.

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Definitions:

Nominal Yield

The nominal yield of a bond or other fixed-income investment is the interest rate stated on the financial instrument, which does not account for inflation or the compounding of interest.

Semiannual Interest Payments

These are interest payments made twice a year on a financial instrument, such as a bond.

Coupon Rate

The annual interest rate paid by a bond's issuer to its bondholders, usually expressed as a percentage of the face value.

Face Value

The nominal or dollar value printed on a stock, bond, or other financial instrument, representing its legal value.