Which of the Following Statements Is True of Confidence Intervals

question 21

Multiple Choice

Which of the following statements is true of confidence intervals?

• A)Confidence intervals in a CLM are also referred to as point estimates.
• B)Confidence intervals in a CLM provide a range of likely values for the population parameter.
• C)Confidence intervals in a CLM do not depend on the degrees of freedom of a distribution.
• D)Confidence intervals in a CLM can be truly estimated when heteroskedasticity is present.

---

Definitions:

NPV

Net Present Value (NPV) is a financial metric used to assess the profitability of an investment, calculating the difference between the present value of cash inflows and outflows over a period of time.

IRR

The Internal Rate of Return is a financial measurement employed to gauge the potential profit of investments.

Flexibility Option

An investment option that provides the holder with the ability to respond to changes in the financial market or business environment.

Surrogate Beta

Surrogate beta is a method used in finance to estimate the beta of a project or investment by using the beta of a similar, publicly traded company or project as a proxy.