An Auditor Was Hired to Verify the Accuracy of a Company's

question 94

Multiple Choice

An auditor was hired to verify the accuracy of a company's new billing system.Thirty-five (35) invoices produced since the system was installed were sampled.The average error on the invoices was $1.00.Historically,the population standard deviation is around $124.00.A 97% confidence interval for the mean error per invoice would be _____.

• A)[-268.08,270.08]
• B)[-6.69,8.69]
• C)[-44.48,46.48]
• D)[-38.40,40.40]
• E)[-9.17,11.66]

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Definitions:

Business Cycle

The fluctuation of economic activity that an economy experiences over a period of time, marked by phases of expansion and contraction.

Interest Rate Fluctuations

Variations in the interest rate over time, which can affect the value of investments, loans, and savings.

No-Arbitrage Condition

A theoretical situation where there is no possibility of risk-free profits – prices in the financial markets should exclude the possibility of arbitrage opportunities.

Risk-Return Dominance

A principle stating that an investment or portfolio is more desirable if it has a higher expected return for a given level of risk, or lower risk for a given level of expected return.