The Averaging Effect Means That as You Average More and More

question 34

Multiple Choice

The averaging effect means that as you average more and more observations from a given distribution,the variance of the average

• A)increases.
• B)decreases.
• C)is unaffected.
• D)could either increase,decrease,or stay the same.

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Definitions:

Operating Activities Section

Part of the cash flow statement that shows cash inflows and outflows related to the primary, day-to-day operations of the business.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life.

Noncash Item

Transactions or items that appear on an income statement or in financial statements but do not affect cash flow, such as depreciation and amortization.

Financing Activities

Transactions related to raising capital and repaying investors, included within the cash flow statement.