If You Know Nothing About a Person, the Best Guess

question 4

Multiple Choice

If you know nothing about a person, the best guess to make about his or her religion is whatever the most common religion is. Always guessing the most common religion, you will make quite a few incorrect guesses. Assume the value of lambda for the relationship between race and religious affiliation is .65. By what proportion could you reduce your number of errors if, before you guess their religious affiliation, you are told their race?

• A) .00
• B) .35
• C) .65
• D) 1.00

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Definitions:

Plantwide Overhead Rate

A single overhead absorption rate used throughout an entire plant or facility to allocate indirect costs to products.

Direct Labor Hours

The total hours worked by employees directly involved in the production of goods or delivery of services.

Departmental Overhead Rates

Overhead rates calculated for specific departments within a company, allowing for more accurate assignment of overhead costs to products.

Direct Labor Hours

The total hours worked by employees directly involved in the production process.