An Anthropologist Wants to Compare the Average Lifespans of the Current

question 13

Multiple Choice

An anthropologist wants to compare the average lifespans of the current residents of a village in Uganda to that of those who resided there 100 years ago. Five residents who died this year are randomly selected to be compared to five residents who died 100 years ago. Although the difference in average lifespans is 16.4 years, the results are not statistically significant (P-value = 0.2169) . The most likely explanation is

• A) that it is unlikely that the measurements from 100 years ago are accurate.
• B) that 16.4 years isn't really a long time when considering an entire lifetime.
• C) that the sample size is small, so variability makes large differences hard to detect.
• D) that the calculation was in error.

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Definitions:

Fair Value Hedge

A type of hedge that is used to mitigate the risk of changes in the fair value of an asset or liability or an identified portion of such an asset or liability.

Forward Contract

A financial derivative that represents a customized agreement to buy or sell an asset at an agreed-upon price on a specific future date.

Spot Rate

This is the current market price at which a particular currency can be bought or sold for immediate delivery.

Cash Flow Hedge

A financial strategy used to manage the risk of fluctuating cash flows due to changes in exchange rates, interest rates, or commodity prices.