Luke and Beth Were Recently Married Soon After Graduating from College

question 29

Multiple Choice

Luke and Beth were recently married soon after graduating from college. Although they incurred a significant amount of debt to finance their education, both recently got good-paying jobs and appear to have promising careers. Given their situation, down the road Luke and Beth:

• A) are almost certain to be able to retire comfortably when the time comes, given the high level of income they are likely to earn.
• B) could be able to retire comfortably, but doing so will take planning and discipline on their part.
• C) have little chance of enjoying a comfortable retirement because the college debts will take years to repay and become a major burden.
• D) will probably find that Social Security will provide an adequate retirement, but that they may need to supplement this with a modest pension if they really want to enjoy the fine life in their golden years.

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Definitions:

Test Statistic

A figure determined from data samples, which is used during a hypothesis test to evaluate whether to refuse the null hypothesis.

Type I Error

An erroneous denial of a valid null hypothesis, commonly called a "false positive."

Null Hypothesis

A hypothesis used in statistics that suggests there is no significant difference or effect, typically to be tested against an alternative hypothesis.

Alternative Hypothesis

The hypothesis that proposes a difference or relationship exists between two variables, contrasting the null hypothesis.