The Next Questions Are Based on the Following Information

question 125

Multiple Choice

The Next Questions Are Based On The Following Information:
The dean of a business college in the Midwest claims that he can correctly identify whether a student is a finance major or a music industry management major by the way the student dresses.Suppose in actuality that he can correctly identify finance majors 84% of the time,while 16% of the time he mistakenly identifies a music industry management major as a finance major.Presented with one student and asked to identify the major of this student (who is either a finance or music industry management major) ,the dean considers this to be a hypothesis test with the null hypothesis being that the student is a finance major and the alternative that the student is a music industry management major.
-An assembly line will be shut down for maintenance if the defect rate exceeds 2.3%.Suppose you adopt a 5% significance level and take a random sample of 200 items from the assembly line and compute the proportion of defective items.For what values of the sample proportion will the assembly line be shut down?

• A)0.034
• B)0.038
• C)0.036
• D)0.040

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Definitions:

New Stock

Shares that are issued for the first time to the public by a company seeking to raise capital.

Indirect Method

A technique used in financial reporting to convert net income into net cash flow from operating activities, by adjusting for non-cash transactions.

Investment Bankers

Financial professionals who assist corporations and governments in raising capital by underwriting and issuing securities and advising on mergers and acquisitions.

Financial Intermediation

The process by which financial institutions act as intermediaries between lenders and borrowers.