A Sample of 250 People Resulted in a Confidence Interval

question 12

Multiple Choice

A sample of 250 people resulted in a confidence interval estimate of between 0.14 and 0.20 for the proportion of people who believe that tax increase proposed by the federal government is justified. Based on this information, what was the confidence level used in this estimation?

• A) approximately 79%
• B) 95%
• C) approximately 36.9%
• D) approximately 1.26%
• E) approximately 90%

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Definitions:

AAA Corporate Bonds

The highest quality bonds issued by corporations with a strong ability to repay the debt, making them low-risk investments.

Interest Rates

The amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal, typically on an annual basis.

Pure Expectations Hypothesis

A theory that suggests that the interest rates on long-term bonds will equal an average of current and future short-term interest rates.

Yield Curve

A graphical representation showing the relationship between the interest rates on debts of different maturities, typically of government bonds, highlighting investors' expectations for future interest rates and economic conditions.