We Normally Compute the Variance Using N - 1 in the Denominator

question 30

Multiple Choice

We normally compute the variance using N - 1 in the denominator because

• A) it is easier that way.
• B) it leads to an unbiased estimate of the sample variance.
• C) it leads to an unbiased estimate of the population variance.
• D) it overestimates that population variance.

---

Definitions:

Equity Method

An accounting technique used to record an investor's proportional share of the investee company's income, expenses, and dividends received.

Investment Balance

The total value of all securities, such as stocks, bonds, and other investments, an individual or entity owns.

Cash Dividends

Earnings paid out to shareholders by a corporation, typically as a profit distribution.

Equity Method

An accounting technique used to record investments in other companies, recognizing the investor’s share of investee profits and losses.