A manager of the credit department for an oil company would like to determine whether the average monthly balance of credit card holders is equal to $75. An auditor selects a random sample of 100 accounts and finds that the average owed is $83.40 with a sample standard deviation of $23.65. If you were to conduct a test to determine whether the auditor should conclude that there is evidence that the average balance is different from $75, which test would you use?
A) Z-test of a population mean
B) Z-test of a population proportion
C) t-test of a population proportion
D) t-test of population mean

Question

Quizplus · Accepted Answer

Since the sample size is greater than 30 and the population standard deviation is not known, the appropriate test to use is the t-test of a population mean. Therefore, option D is the correct choice.

A Manager of the Credit Department for an Oil Company