One of the Major U

question 98

Multiple Choice

One of the major U.S. tire makers wishes to review its warranty for their rainmaker tire. The warranty is for 40,000 miles. The tire company believes that the tire actually lasts more than 40,000 miles with a standard deviation of 15,000 miles. A sample 49 tires revealed that the mean number of miles is 45,000 miles. Test the hypothesis with a 0.05 significance level.

• A) At a 5% level of significance, our decision is to reject the null hypothesis. The tires last more than 40 000 miles.
• B) At a 5% level of significance, our decision is to accept the null hypothesis. The tires last 40,000 miles.
• C) At a 5% level of significance, we should have used the t-test, rather than the z-test.

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Dollar-Euro Exchange Rate

The value of one U.S. dollar in terms of the European Union's euro, reflecting the relative strength of the two economies and impacting international trade and finance.

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The condition where the supply of Euros exceeds the demand in the foreign exchange market.

Flexible Exchange Market

A system where the value of a currency is allowed to fluctuate according to the foreign exchange market.