Exhibit 12-3: in a Study of the Membership of the Most

question 15

Multiple Choice

Exhibit 12-3: In a study of the membership of the most influential business persons' organization in River City, it was found that the proportion of those who are also members of the Buffalo Honorary Club (BHC) is much higher than the portion of BHC members in the general city population.One might conclude that participation in BHC activities is a positive influence in leading people to become successful businesspersons or a number of alternative hypotheses could be suggested.Choose the correct hypothesis for each question.
-Refer to Exhibit 12-3.Which is a hypothesis of common cause?

• A) The BHC stresses the qualities of being a good businessperson.
• B) The BHC tends to invite only successful businesspersons to join.
• C) People who are attracted to BHC are also likely to be attracted to a business career.
• D) The businesspersons' organization's membership committee is biased in favor of BHC members.
• E) The BHC credo is more oriented to business virtue than is the credo of other similar organizations.

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Definitions:

Unamortized Premium

The portion of a bond premium that has not yet been amortized or gradually written off as an expense over the bond's life.

Redeemed

The act of repurchasing or paying off a security such as a bond or preferred stock at its maturity or before.

Loss On Redemption

The financial loss experienced when a debt security is redeemed before its maturity date for more than its par value.

Carrying Value

The book value of an asset on a company’s balance sheet, calculated as the original cost minus accumulated depreciation.