Sampling methods and confidence intervals are routinely used for financial audits of large companies. Which of the following is an advantage of doing it this way, versus having a complete audit of all records?
a. It is much cheaper.
b. A sample can be done more carefully than a complete audit.
c. A well-designed sampling audit may yield a more accurate estimate than a less carefully carried out complete audit or census.
d. All of the above.
Question 2
Which of the following statements is true regarding a 95 confidence interval? Assume numerous large samples are taken from the population.
a. In 95 of all samples, the sample proportion will fall within 2 standard deviations of the mean, which is the true proportion for the population.
b. In 95 of all samples, the true proportion will fall within 2 standard deviations of the sample proportion.
c. If we add and subtract 2 standard deviations to/from the sample proportion, in 95 of all cases we will have captured the true population proportion.
d. All of the above.
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