The Problem with Relying on a Point Estimate of a Population

question 36

Multiple Choice

The problem with relying on a point estimate of a population parameter is that:

• A)it has no variance.
• B)it might be unbiased.
• C)it might not be relatively efficient.
• D)it does not tell us how close or far the point estimate might be from the parameter.

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Definitions:

Flexible Budget

A budget that adjusts or varies with changes in volume or activity, allowing for more accurate forecasting and planning.

Production Budget

An estimated financial plan for the production process, detailing costs and resources needed to meet production goals.

Sales Budget

An estimate of the expected sales revenue for a certain period of time, often used as a plan for business operations and resource allocation.

Capital Expenditures Budget

A budget that outlines projected spending on fixed assets over a period, including purchases of property, equipment, and other long-term investments.