What Effect Would Increasing the Sample Size Have on the Confidence

question 4

Multiple Choice

What effect would increasing the sample size have on the confidence intervals of the group?

• A) Confidence intervals would decrease in size.
• B) Confidence intervals would increase in size.
• C) Confidence intervals are unaffected by sample size.
• D) Confidence intervals could either increase or decrease in size.

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Definitions:

Inflation Rate

The inflation rate is the percentage increase in the general price level of goods and services in an economy over a period of time.

Exchange Rate

The price of one country's currency in terms of another's, used in international trade and investment.

Spot Rate

The current market price at which a particular asset can be bought or sold for immediate delivery and payment.

Covered Interest Arbitrage

A strategy in which an investor uses a forward contract to hedge against exchange rate risk when investing in foreign interest-bearing instruments.