The Difference Between the Estimated and Actual Value of a Variable

question 47

Multiple Choice

The difference between the estimated and actual value of a variable for three cases were as follows: -3, +9, +2. What type of error do these differences suggest?

• A) bias
• B) measurement error
• C) random error
• D) variance

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Definitions:

Total Market Value

The aggregate valuation of a company or asset in the marketplace, based on current share price and the total number of outstanding shares.

Reasonable Level

A term often used in finance and economics to describe an equilibrium or average measure that is considered acceptable under given conditions.

Capital Budget

The planning process used by a company to determine whether its long-term investments or projects are worth pursuing.

Dividend Per Share

The sum of declared dividends for every share of common stock issued, divided by the number of outstanding shares.