A Financial Analyst Is Interested in Estimating the Proportion of Publicly

question 6

Multiple Choice

A financial analyst is interested in estimating the proportion of publicly traded companies on the Toronto Stock Exchange that have cash balances of more than 10 percent of the total assets of the company. A random sample of 100 companies shows that 13 had cash balances of more than 10 percent of assets. The 90 percent confidence interval estimate is

• A) 0.0747 to 0.1853
• B) 0.0641 to 0.1959
• C) -0.0870 to 0.1730
• D) -0.0507 to 0.1494
• E) -0.0412 to 0.1588

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Definitions:

Return on Common Stockholders' Equity

A financial ratio that measures the profitability of a company in generating profit from its shareholders' investments, specific to common stock.

Preferred Stock Dividends

Payments made to holders of preferred stock, often at a fixed rate, which are prioritized over dividends to common stockholders.

Inventory Turnover Rate

A metric that measures how quickly a company sells its inventory within a given period, calculated by dividing cost of goods sold by average inventory.

Office Furniture

Items used in an office setting for the purpose of work, including desks, chairs, filing cabinets, and bookshelves.