20 Economists Were Sampled and Asked to Predict If the National

question 84

Multiple Choice

20 economists were sampled and asked to predict if the national economy would improve during the next twelve months. Eleven of the economists predicted an increase, two economists predicted no change, and seven economists predicted a decrease in the economy. Conduct a hypothesis test at the 0.10 significance level to determine if the majority of economists predict an increase. The null hypothesis is:

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Definitions:

Bond Premium

The amount by which the market price of a bond exceeds its par value, typically arising when the bond's interest rate is higher than the market rate.

Forward Contract

A customized financial agreement to buy or sell an asset at a specified future date at a price agreed upon today.

Future Date

A specified day in the future, often used in the context of agreements or financial transactions that will occur at a later time.

Amortized Historical Cost

The accounting method of gradually writing off the initial cost of an asset over a period, adjusting for depreciation or amortization.