The Size of the Sampling Error Is

question 92

Multiple Choice

The size of the sampling error is

• A) Directly related to the sample size, i.e., the larger the sample size, the larger the sampling error.
• B) Directly related to the population mean, i.e., the larger the mean, the larger the sampling error.
• C) Inversely related to the sample size, i.e., the larger the sample size, the smaller the sampling error.
• D) Inversely related to the population standard deviation, i.e., the smaller the standard deviation, the larger the sampling error.

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Definitions:

Coupon Rate

The annual interest rate paid by a bond relative to its face value, expressed as a percentage.

Duration-based Immunization

A strategy used in portfolio management to minimize the risk of interest rate fluctuations by matching the duration of assets and liabilities.

Rebalanced

The process of realigning the weightings of a portfolio of assets to maintain an original or desired level of asset allocation or risk.

Modified Duration

A measure of the price sensitivity of a bond or other debt instrument to an interest rate change, factoring in the changing cash flow timings.