The Daily Revenue from the Sale of Fried Dough at a Local

question 70

Multiple Choice

The daily revenue from the sale of fried dough at a local street vendor in Boston is known to be normally distributed with a known standard deviation of $120.The revenue on each of the last 25 days is noted,and the average is computed as $550.A 95% confidence interval is constructed for the population mean revenue.If the data from the last 40 days had been used,then the resulting 95% confidence intervals would have been _____________________.

• A)Wider,with a larger probability of reporting an incorrect interval
• B)Wider,with the same probability of reporting an incorrect interval
• C)Narrower,with a larger probability of reporting an incorrect interval
• D)Narrower,with the same probability of reporting an incorrect interval

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Definitions:

4-Year Bond

A debt security that matures in four years from the issuance date.

Forward Rate

An interest rate agreed today for a loan to be made or a bond to be purchased at a future date.

Zero-Coupon Bond

A type of bond that does not pay interest during its life but is sold at a discount from its face value and pays its full face value at maturity.

Purchase Price

The amount of money paid to acquire a good or service.