An Advertising Company Has Developed a New Ad for One

question 117

Multiple Choice

An advertising company has developed a new ad for one of the national car manufacturing companies. The ad agency is interested in testing whether the proportion of favorable response to the ad is the same between male adults versus female adults. It plans on conducting the test using an alpha level equal to 0.05. A sample of 100 adults of each gender will be used in the study. Each person will be asked to view the ad and indicate whether they find the ad to be "pleasing" or not. The samples resulted in 57 males that liked the ad and 47 females that liked the ad. Based on this information, what is the value of the test statistic?

• A) z = 1.645
• B) z = 1.42
• C) t = 2.234
• D) z = 1.024

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Definitions:

Market Risk Premium

The additional return an investor expects from holding a risky market portfolio instead of risk-free assets.

Expected Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling, as anticipated by consumers, businesses, and investors.

Required Return

The minimum rate of return on an investment that investors expect to compensate them for the level of risk.

Beta

A measure of a stock's volatility relative to the overall market, indicating its risk compared to the market average.