You Want to Test the Hypothesis That the Prime Rate

question 80

Multiple Choice

You want to test the hypothesis that the prime rate and inflation are independent.The following table of frequencies is prepared from a random sample,collected in various countries and various time periods: shown below. Based on an analysis of the data in this table,which conclusion can be made at α = .01?

• A)The prime rate and inflation rate are independent.
• B)The prime rate and inflation rate are not independent.
• C)Small observed frequencies in some cells suggest that no reliable conclusion can be made.
• D)Small expected frequencies in some cells suggest that no reliable conclusion can be made.

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Definitions:

Activity

In accounting and finance, it typically refers to the level of business operations or transactions in a given period.

Relevant Activity Base

A factor that causes changes in the behavior of costs, used to allocate fixed costs to cost objects effectively.

Decision-Making Needs

Requirements or information essential for making informed choices or judgments in various situations.

Management

The coordination and administration of tasks to achieve a company's objectives, involving planning, organizing, leading, and controlling resources.