A Local Company Wants to Evaluate Their Quality of Service

question 23

Multiple Choice

A local company wants to evaluate their quality of service by surveying their customers. Their budget limits the number of surveys to 100. What is their maximum error of the estimated mean quality for a 95% level of confidence and an estimated standard deviation of 5?

• A)0.9604
• B)0.98
• C)1.96
• D)5%

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Definitions:

Constant Growth Model

A method to value a stock by assuming that dividends grow at a constant rate indefinitely.

Capital Gains

The profit earned from the sale of a capital asset, such as stocks, bonds, or real estate, where the sale price exceeds the purchase price.

Dividend Growth Rate

The annualized percentage rate of growth of a company's dividend payments.

Efficient Markets Hypothesis

The theory that all available information is already reflected in stock prices, implying it is impossible to consistently achieve higher returns.