When Literary Digest Incorrectly Predicted the Results of the 1936

question 8

Multiple Choice

When Literary Digest incorrectly predicted the results of the 1936 election after polling only its own readers, its failure was because

• A) its readers were asked to guess as to the outcome, rather than offering up their own opinions.
• B) it had not obtained a random sample of the population.
• C) its readers were generally wealthy, and not reflective of the population at large.
• D) Both A and B.
• E) Both B and C.

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Definitions:

Semiannually

Taking place twice within a year or every half year.

Effective Interest Method

An accounting technique for calculating interest expense on bonds that amortizes discount or premium over the life of the bonds.

Straight-line Method

A depreciation technique that allocates an equal portion of the value of an asset over its useful life, used to gradually reduce the asset's book value.

Par Value

A nominal value or face value given to a share of stock at the time of its issuance, often used for legal and accounting purposes.