The Width of a Confidence Interval Will Be

question 75

Multiple Choice

The width of a confidence interval will be:

• A)Narrower for 98% confidence than for 90% confidence.
• B)Wider for a sample size of 64 than for a sample size of 36.
• C)Wider for a 99% confidence than for 95% confidence.
• D)Narrower for sample size of 25 than for a sample size of 36.
• E)None of the above.

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Definitions:

Stock-Index Option Markets

Marketplaces where options based on the movements of stock market indices are traded, allowing investors to speculate or hedge against market swings.

Uncovered Call Option

An option contract that is sold without holding an offsetting position in the underlier, thus exposing the seller to unlimited risk.

Uncovered Put Option

A type of options strategy where the seller of the put option does not have a sufficient position in the underlying asset, exposing them to potentially unlimited losses.

Digital Option

A financial instrument that provides a fixed return if the market price is above (for a call) or below (for a put) a certain level at expiration.