James Has Constructed a 95% Confidence Interval and Found the Confidence

question 31

Multiple Choice

James has constructed a 95% confidence interval and found the confidence limits to be 75 and 79.We can conclude that

• A) 95% of all population means will be between 75 and 79.
• B) scores from 95% of individuals within the population will be between 75 and 79.
• C) 95% of confidence intervals that are calculated in this manner will contain the true population mean.
• D) mathematically,95% of 79 is 75.

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Definitions:

Dynamic Hedging

A strategy that involves periodically adjusting the quantities of instruments used in a portfolio to hedge against risk as market conditions change.

Out-of-the-money

A term used in options trading to describe an option that has no intrinsic value. A call option is out-of-the-money if the stock price is below the strike price, and a put option is out-of-the-money if the stock price is above the strike price.

Intrinsic Value

The intrinsic worth of an asset, determined by the underlying true value encompassing all elements of the business, covering both tangible and intangible factors.

Put Option

A financial contract that gives the buyer the right, but not the obligation, to sell an asset at a specified price within a specific time period.