A Statistical Significance Level of .05 Means That

question 57

Multiple Choice

A statistical significance level of .05 means that

• A)the probability that a relationship as strong as the observed one can be attributed to sampling error alone is 5 percent.
• B)we can be 5 percent sure that the relationship is real and not due to sampling error.
• C)there is an .05 percent chance that a relationship as strong as the observed one can be attributed to sampling error.
• D)the difference we observed in the table is 5 percent different.
• E)there is a 5 percent standard error in the observations.

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Definitions:

Preferred Stock Conversion

The process by which holders of preferred shares can convert their stocks into a predetermined number of common shares, often under specific conditions.

Dividends in Arrears

Dividends on cumulative preferred stock that have not been declared or paid for the current or previous periods, accumulating until they are paid out.

Cumulative Preferred Stock

A type of preferred stock that entitles its holders to receive dividends that have been missed in previous payments before any dividends can be issued to other types of shareholders.

Participating Preferred Stock

A type of preferred stock that offers dividends that exceed the fixed amount if the company's profits reach predetermined targets.