A Student Answers 26 Questions Correctly

question 141

Multiple Choice

A student answers 26 questions correctly.Is that enough to convince you that he is not merely guessing? Explain.

• A)No; if the student were guessing,we would expect him to answer 15 questions correctly with a standard deviation of 11.25.26 is 0.98 standard deviations above the expected value.That would not be an unusual result.
• B)Yes; if the student were guessing,we would expect him to answer 15 questions correctly with a standard deviation of 3.10.26 is 3.5 standard deviations above the expected value.That would be an unusual result.
• C)Yes; if the student were guessing,we would expect him to answer 15 questions correctly with a standard deviation of 3.35.26 is 3.3 standard deviations above the expected value.That would be an unusual result.
• D)Yes; if the student were guessing,we would expect him to answer 15 questions correctly with a standard deviation of 3.87.26 is 2.8 standard deviations above the expected value.That would be an unusual result.
• E)No; if the student were guessing,we would expect him to answer 15 questions correctly with a standard deviation of 3.35.26 is 3.3 standard deviations above the expected value.That would not be an unusual result.

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Definitions:

Exchange Rate Risk

The potential for losses due to fluctuation in the exchange rate between two currencies in international transactions.

Foreign Exchange Market

A global marketplace for trading currencies against each other, determining the exchange rate values between different currencies.

Currency Speculators

Investors who buy and sell foreign exchange with the aim of making a profit from changes in exchange rates, influencing currency values and economic conditions.

Spot Trade

A transaction for the immediate delivery of a currency, financial instrument, or commodity.