The Averaging Effect Means That as You Average More and More

question 34

Multiple Choice

The averaging effect means that as you average more and more observations from a given distribution,the variance of the average

• A)increases.
• B)decreases.
• C)is unaffected.
• D)could either increase,decrease,or stay the same.

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Definitions:

Dividends

Dividends are payments made by a corporation to its shareholder members, reflecting a portion of the corporate profits allocated for distribution.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, are subtracted from total revenue.

Revenue

The income received by a company from its business activities, usually from the sale of goods and services to customers.

Expenses

Money spent or cost incurred in an entity's efforts to generate revenue, representing the cost of doing business.