Ophelia O'Brien, VP of Consumer Credit of Credit First Banks $\alpha$

question 31

Multiple Choice

Ophelia O'Brien, VP of Consumer Credit of Credit First Banks (CFB) , monitors the default rate on personal loans at the CFB member banks. One of her standards is "no more than 5% of personal loans should be in default." On each Friday, the default rate is calculated for a sample of 500 personal loans. Last Friday's sample contained 30 defaulted loans. Using
$\alpha$ = 0.10, the critical z value is ___.

• A) 1.645
• B) -1.645
• C) 1.28
• D) -1.28
• E) 2.28

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Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Retained Earnings

Profits that a company keeps after dividends are paid, which can be used for reinvestment in the business or to pay down debt.

Liabilities

Financial obligations or debts a company owes to external parties.

Cash

Liquid assets held by an entity that can be immediately used for transactions.