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Exhibit 11-3
in Order to Determine Whether or Not a Particular

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Exhibit 11-3
In order to determine whether or not a particular medication was effective in curing the common cold, one group of patients was given the medication, while another group received sugar pills. The results of the study are shown below.
 Patients Cured  Patients Not Cured  Received medication 7010 Received sugar pills 2050\begin{array}{lll}&\text { Patients Cured }&\text { Patients Not Cured }\\\text { Received medication } & 70 & 10 \\\text { Received sugar pills } & 20 & 50\end{array} We are interested in determining whether or not the medication was effective in curing the common cold.
-Refer to Exhibit 11-3. The expected frequency of those who received medication and were cured is


Definitions:

Profits

The financial gain obtained when the revenue from business activities exceeds the expenses, taxes, and costs of operation.

Insolvent

A financial state in which an individual or entity cannot meet its debt obligations as they come due, or its liabilities exceed its assets.

Debt Payment

The act of paying back the principal and interest on borrowed money, typically according to a predetermined schedule.

Risk

The potential for losing something of value or the possibility of an adverse outcome.

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