QUESTION: 841

Melissa Hart, a quantitative analyst with the Kansas City Federal Reserve, has been involved with accumulating data for an essay regarding economic conditions in her area. Specifically, Melissa has been gathering data related to the levels of consumer debt in the state of Missouri. The following is a description of the data:
Sample mean: $3,451.00
Standard deviation of the sample: $819
Number of observations: 441
Assume that Ms. Hart formulates a hypothesis test in which the null hypothesis specifies that the population mean is equal to $4,600. Additionally, assume that the population standard deviation is unknown. Given this information, what is the standard error of the estimate? Further, what is the test statistic? Choose the best answer.

The answer cannot be determined from the information provided.
$39.09; 1.17
$1.86; (617.74)
$39.00; 0.52
$39.00; (29.46)
$1.86; 862.00
$39.09; (29.39)

Answer(s): E

Explanation:

If the population standard deviation is unknown, as in this example, the standard error of the estimate is found by using the following equation:
{Standard error = s / square root of n} where s = the sample standard deviation and n = the number of observations in the sample.
In this example, all of the necessary information has been provided, and the determination of the standard error of the estimate is found as:
{Standard error = [$819 / 21] = $39}
Now that the standard error of the estimate has been calculated, the test statistic can be found by using the following equation: {Test statistic = [sample statistic - value of the population parameter under the null hypothesis] / standard error of the sample statistic]. Again, all of the necessary information has been provided, and the calculation of the test statistic is found as follows:
{Test statistic = [$3,451 - $4,600] / $39 = (29.46)}
This is a rather large test statistic, and will likely result in the rejection of the null hypothesis unless a very low level of confidence is employed.

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QUESTION: 842

How many years would it take for a deposit of $10,000 to become $200,000, if interest of 9% per year is compounded annually?

400.93
28.89
134.64
34.76
8.04

Answer(s): D

Explanation:

On the BAII Plus, press 10000 PV, 0 PMT, 200000 +/- FV, 9 I/Y, CPT N. On the HP12C, press 10000 PV, 200000 CHS FV, 9 i, then press n. Note that the HP12C shows 35 as the answer.

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QUESTION: 843

What is the Net Present Value of this series of annual cash flows at an interest rate of 12% per year: Year 0:
<$30,000>, Year 1: $5,000, Year 2: $8,000, Year 3: $11,000, Year 4 <> are used to indicate a negative number).

$951.21
<$1,795.81>
$1,104.37
<$1,077.49>
<$1,579.31>

Answer(s): B

Explanation:

On the BAII Plus, press CF 2nd CLRWork 30000 +/- ENTER DownArrow 5000 ENTER DownArrow DownArrow 8000 ENTER DownArrow DownArrow 11000 ENTER DownArrow DownArrow 15000 ENTER DownArrow DownArrow 2nd Quit. Then press NPV 12 ENTER DownArrow CPT. On the HP12C, press these keys: 30000 CHS BlueShift CFo 5000 BlueShift CFj 8000 BlueShift CFj 11000 BlueShift CFj 15000 BlueShift CFj. Then press 12 i, YellowShift NPV. The "DownArrow" represents
the downward-pointing arrow on the top row of the BAII Plus keyboard. Make sure the BAII Plus has the P/Y value set to 1.

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QUESTION: 844

What is a listing of all possible outcomes of an experiment and their corresponding probability of occurrence called?

Random variable
Frequency distribution
Subjective probability
None of these answers
Probability distribution

Answer(s): E

Explanation:

The probability distribution shows the outcomes with corresponding probabilities.

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QUESTION: 841

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QUESTION: 842

Explanation:

QUESTION: 843

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QUESTION: 844

Explanation: